Russia exported record volumes of gasoline and diesel in December 2022
Exports of diesel fuel from Russia in December 2022 reaching a multi-year high of 1.2 million barrels per day. This is reported in the report of the Energy Research Agency (IEA) dated January 18, 2023. Deliveries of Russian diesel to the dispenser (EU) in December also set a record over the past 10 months and amounted to 720,000 barrels per day.
According to the IEA, in December last year, Russia also increased its gasoline reserves abroad to a record – by 110,000 barrels per day at once compared to exports in December 2021 to 275,000 barrels per day. “Part [этого] the increase has come to the EU,” the report says.
In general, the export of oil products from Russia to Europe during 2022 averaged 1.2 million barrels per day, remaining stable compared to 2021.
European countries led to a change in the situation on the sales market for Russian oil refiners. In 2021, Russia supplied the EU with 91 million tons of oil products, or 14% of the region’s needs. 14% of Russian exports, or 20 million tons, went to Africa and Latin America, another 13%, or 19 million tons, to the Asia-Pacific region. In 2021, the United States supplied 12 million tons of petroleum products, or 8% of Russian exports.
low prices have been increasing imports of oil products from Russia over the past few months, as on February 5, 2023, an embargo on maritime supplies of oil products to the EU comes into effect. reduce the excess of prices for oil products from Russia. According to the Wall Street Journal, we are talking about the established marginal prices separately for more expensive (diesel) and more oil (fuel oil) oil products. The level has not yet been named. But analysts earlier predicted Vedomosti that the former could be set at $650/t and the latter at $350/t.
Assumed restrictive measures are already in place for Russian oil: since December 5, 2022, especially due to the embargo on marine supplies of raw materials from the Russian Federation to the EU, as well as on the level of oil prices at $60/bbl. Exceptions from the embargo were received by countries that import oil through the Druzhba pipeline: Hungary, Slovakia, the Czech Republic, and Bulgaria.
Despite the conclusion, exports of oil and oil products remain strong, IEA exports. The increase in the supply of petroleum products partially offset oil exports in December by 200,000 barrels per day in annual terms. At the same time, after December 5, oil supplies to the EU by sea were observed by 240,000 barrels per day in annual terms, which was also partially offset by an increase in pumping through the Druzhba export pipeline by 100,000 barrels per day. Against this background, the share of Russian exports in 2022 is up to 39% from 45% in 2021.
In total, in 2022, the export of oil and oil products from Russia increased by 4% to 7.8 million barrels per day. The main increase, according to the IEA, came from oil, as the export of petroleum products “remained at the same level.”
Russia occupies a third place in the world after the USA and China in the production of petroleum products and supplies about half of the produced fuel for sale. In 2021, Russian refineries processed 285 million tons of oil, and 146 million tons of oil products were exported. Diesel fuel is one of the main export products of the Russian Federation – 80 million tons were produced abroad in 2021, about 40 million were delivered. Gasoline is mainly consumed in the domestic market, 10% of total production was sent for export in 2021, or 4 million tons
In 2022, according to a lower estimate, oil refining in Russia decreased by 2.9% compared to 2021 to 272 million tons, Deputy Prime Minister Alexander Novak said at the end of December. At the same time, the production of diesel and gasoline as ultra-high-margin products increased by 5.9% to 85 million tons and by 4.2% to 42.5 million tons, respectively.
According to senior analyst Alfa Bank Nikita Blokhina, growth in exports of petroleum products from the Russian Federation in exceptional cases. In particular, in December 2022, Russian refineries increased their refining volume by more than 100,000 bbl. compared to November to last year’s record 5.7 million barrels per day. Also increased the volume of exports of “panic purchases” of fuel in the EU on the eve of the embargo on the supply of petroleum products from Russia.
According to Blokhin, in January 2023, the growth of oil refining and fuel exports from the Russian Federation may begin, as European consumers will consume fuel stocks in the EU the day before due to February restrictions.
But FG Finam analyst Sergey Kaufman considers the setting of a new record for the export of petroleum products in January 2023 insignificant. “Russian companies should start reconfiguring fuel from the European market in advance. At the same time, the absorption of Russian oil – China and India – have large oil refining capacities and do not have a large share of the refining margin with Russia,” he explains.
Senior analyst “BCS World of Investments” Ronald Smith agreed with Blokhin that a new record for diesel and gasoline exports could be set in January, “although this is not guaranteed.” In his opinion, after February 5, oil exports may increase, since the logistics of oil supply in Asia is simpler than the availability of an equivalent amount of various oil products.