SAUDI ARABIA BECAME THE LARGEEST BUYER OF RUSSIAN FUEL OIL

Saudi Arabia became the largest importer of Russian fuel oil and seaborne Vacuum Gas Oil (VGO) in November, traders and LSEG data show

Total exports of fuel oil and VGO from Russian ports rose 6% last month from October to about 4.26 million tonnes, Reuters calculations based on LSEG data show. After the European Union’s comprehensive embargo on Russian oil products came into force, Asian countries became the main destination for Russian fuel oil and VGO supplies.

Direct deliveries of fuel oil and VGO from Russian ports to Saudi Arabia increased 29% in November from the previous month to 0.85 million tonnes. Shipments of Russian fuel oil and VGO to India decreased 5% last month to around 0.47 million tonnes, while shipments of dark oil products from Russian ports to China decreased 25% to 0.32 million tonnes.

According to market participants, fuel oil supplies to China are decreasing in anticipation of a tax overhaul that will increase the cost of imported oil products.

China and India import high-grade fuel oil and VGO as refining feedstock as a cheaper alternative to Ural oil. Tankers carrying around 0.6 million tonnes of oil products from Russian ports are on the way, targeting Singapore as the destination, but some of the cargo may also end up in China.

Singapore is the world's largest bunkering hub, and oil tankers often use it as a stopover on the long route to Chinese ports, especially for cargo passing through the Cape of Good Hope rather than the Suez Canal.