Russian oil stored in masses off Asian ports

Data from energy analytics firm Vortexa cited by Bloomberg indicate around 1.1 million tons of Russian high-sulfur fuel oil (HSFO) was stored in tankers near major Asian ports in the week ending October 24. Compared to last year, the amount of fuel oil sitting on tankers has doubled – a sign that Russian oil is now being rerouted to Asia after Western sanctions were announced.

It is being stored on tankers offshore Singapore and Malaysia as Russia floods the Asian market with fuel oil ahead of the EU embargo. In a Thursday analysis, Vortexa’s senior fuel oil analyst Roslan Khasawneh wrote that Russia is the world’s top exporter of residual fuels.

In spite of peak summer demand in the Middle East and South Asia when power plants ramp up consumption to meet cooling demands, HSFO exports from Russia to the east have weighed on fuel oil prices in the region, Khasawneh said.

As summer ends, Middle East demand for Russian fuel oil has slowed, but Asian imports of fuel oil are set to reach historic levels in October, according to Vortexa.

In July and August, Middle Eastern fuel oil imports from Russia reached a record 210,000 barrels per day, but in October demand fell to 90,000 barrels per day.

Khasawneh of Vortexa pointed out that the region is an important fallback warehouse for Russian fuel oil export products. Russian imports to the region have reached record levels. Vortexa said preliminary figures for October showed a new volume of 560,000 bpd, up nearly 50% from September.

The main importers in Asia are China and India, but only 35% of Russian volumes included in Singapore’s import figures were loaded into landed storage tanks. According to Vortexas, the rest of the fuel oil was delivered into floating storage tanks.

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