Saudi Arabia and India are providing a rising share of west Balkan diesel demand, in part to cover refinery outages in Italy and Greece. An influx of discounted Russian diesel east of Suez, enabling higher exports of domestic output, could enhance this trend.
Saudi Arabia has used Egypt's Sidi Kerir terminal as a bulk-breaking point for Long Range 2 (LR2) tankers to increase deliveries of smaller Handysize diesel cargoes into the west Balkans. Exclusively through Sidi Kerir, Egyptian diesel cargo arrivals in Croatia, Slovenia, Albania and Montenegro have made up 21pc of seaborne supply to the west Balkans this year, up from 17pc in all of 2022, according to Vortexa data.
More than 97pc of all diesel cargo arrivals at Sidi Kerir were of Saudi origin in the first half of the year.
Taken together with direct Saudi deliveries to the Adriatic states, Saudi diesel supply to the west Balkans was around 810,300t in the first half of the year, or 23pc of total supply. This is up from a combined 19pc last year.
Saudi Arabia's imports of heavily discounted Russian diesel and gasoil topped 2.22mn t in the first half of this year, after it received the equivalent of just two diesel Handysize cargoes during all of 2022. This has allowed it to use this for domestic consumption and increase exports of domestically produced diesel, at a higher premium, to sanctions-compliant European consumers. The EU introduced a ban on Russian diesel imports on 5 February in response to Russia's war in Ukraine.
Croatia and Slovenia are in the EU, and Albania and Montenegro are candidate countries and appear to be complying with the EU's ban.
India has been following the same pattern of importing Russian diesel for domestic consumption. It exported 280,000t to the west Balkans this year, already exceeding the 2022 total by a third. India's regional market share had quadrupled to 7.8pc in the January-June period. India doubled its market share of the EU and UK diesel import market to 12pc in the first six months of this year.
This has meant traditional Adriatic suppliers Italy and Greece are under pressure from rising competition from suppliers east of Suez. With protracted refinery outages having limited exports, Italy's and Greece's share of west Balkan imports fell to 51pc in the first half of this year, from 58pc in 2022, according to Vortexa data.
Eni's 88,400 b/d Livorno refinery has been offline for maintenance since April, and is scheduled to return online later this month. Saras' 300,000 b/d Sarroch refinery has been running at reduced capacity since one of its crude distillation units (CDUs) went under maintenance in March. Greek firm Motor Oil Hellas' 180,000 b/d Corinth refinery has been shut since mid-May.
