Turkey Remains the Main Destination for Russian Diesel Loadings in June

MOSCOW: Russian Diesel exports are expected to increase in total shipments after seasonal refinery maintenance. As a result, Turkiye is set to become the top destination once again for these exports in June. In May, Russia's offline primary oil refining capacity stood at 4.95 million tons, but this figure could drop to 4.029 million tons in June. Since the imposition of the full EU embargo on Russian oil products in February, traders have been diverting Diesel export supplies to Africa, Asia, and the Middle East instead of Europe, which was previously the main buyer. While Russia has already shipped about 0.9 million tons of Diesel to Turkiye this month, approximately 320,000 tons of that are still en route, and the port of discharge has yet to be confirmed.

According to recent reports, Brazil has emerged as one of the top destinations for Russian seaborne Diesel exports. Since the beginning of this month, approximately 280,000 tons of Diesel have been shipped to Brazil, which is a decrease from May's figure of 450,000 tons. Meanwhile, African countries such as Ghana, Morocco, and Togo have received around 550,000 tons of Diesel from Russian ports in June so far. This marks a decline from May's total of roughly 575,000 tons. It is worth noting that nearly 375,000 tons of Russian Diesel are slated for ship-to-ship transfers near the Greek port of Kalamata and Malta in June, with the final destinations yet to be confirmed. However, most of these cargoes usually end up in Turkey and various Middle Eastern countries.

Recent reports suggest that Russia has not sent any Diesel cargoes to Saudi Arabia in June, despite having delivered approximately 410,000 tons in May. This news comes amidst Brent crude futures experiencing a decline of about 14 percent since the beginning of this year, due to rising interest rates impacting investor appetite. In addition, China's once-promising economic recovery has taken a hit after several months of below-expectation consumption, production, and property market data. Despite Western sanctions, both Russia and Iran have successfully maintained their crude oil supplies, thereby offsetting the production cuts made by Saudi Arabia and other OPEC+ member countries.

The recent failed mutiny by Russian mercenaries has sparked concerns about political instability and has led to an increase in oil prices. However, during the first day of the Energy Asia conference in Kuala Lumpur on Monday, none of the industry executives or officials mentioned the issue during their onstage remarks. It seems that there is currently little geopolitical impact on the market, which is mainly driven by economics rather than geopolitics.