Contrary to the expectations of the West, Moscow is strikingly fast in finding new markets for its oil and especially oil products. Washington and Brussels hoped that with a fairly easy way to circumvent oil sanctions, it would be more difficult to overcome restrictions on gasoline and diesel fuel. However, this product also found its grateful customers.
The EU embargo on Russian oil products, which came into force on February 5, has led to the diversion of diesel fuel not only to Asia, Africa and the Middle East, but also to a greater extent to Latin America. In March, the Russian Federation exported more than 580 tons of diesel fuel to South and Latin America, Reuters reports citing data from Refinitiv Eikon. Almost 440 tons went to the Brazilian market. Truly incomparable volumes: last year, only 74 tons were shipped to this region, and in 2023, in just three months, 663 tons, Reuters notes. Turkey is also buying up Russian diesel that would normally go to Europe, with flows to Turkey hitting a seven-year high, according to Bloomberg.
In the Middle East, Saudi Arabia is also importing increased volumes of Russian diesel, while also shipping a lot of similar products to Europe. In March, traders in the UAE and Saudi Arabia stocked up on Russian diesel fuel, taking advantage of the low price to build up inventories, while boosting exports to Europe and Africa themselves. In mid-March, these countries imported about 500 thousand tons of Russian diesel fuel, compared with almost zero a year ago, Reuters reports, citing data from Refinitiv, Kpler and Vortexa.
The aggregate figures for exports to all these regions (taking into account new sales markets) clearly demonstrate that the West not only failed to stifle raw material exports from the Russian Federation, but even to some extent even helped it to make its way across the ocean. So far, the replacement of Europe with Latin America is going quite well.
In this aspect, there are even fair fears that due to the reduction in production, processing may also decrease, which will affect exports, which are growing strongly. At the same time, among regular customers, such as India, the demand also does not stand still, but increases. For example, India's need for fuel in March increased by 5% compared to the previous year, reaching 20,5 million tons. Demand for both gasoline and diesel was higher in March compared to March last year and February 2023. New sales markets draw off part of the refining capacity for themselves.