Middle East imports more Russian gasoil in September

Spanish Market: Oil products
19/10/22

Gasoil inflows from Russia to the Middle East have increased substantially as Russian diesel and gasoil exports to northwest Europe were falling as term contracts expired.

At 268,000t, September gasoil imports from Russia were significantly higher from 145,000t in August. The UAE was the main importer with 198,000t, followed by Yemen taking 38,000t and Iraq 26,000t, according to Vortexa.

Firms that are still buying Russian volumes on term contracts are slowly phasing out purchases, in preparation for the EU's ban on Russian oil products from January.

A halt in oil products from Russia is forcing European buyers to seek higher volumes from the Mideast Gulf, India and the US, in order to meet demand.

The Middle East remained a major outlet for Russian oil products in September, despite cargo arrivals falling from a record monthly high of 1.4mn t in August.

The total volume of product cargoes, including gasoline, naphtha, gasoil and fuel oil, declined to 1.06mn t last month.

But imports are still significantly higher than 250,000-450,000t of products that the Middle East typically received before the armed conflict with Ukraine started in February.

The quickly-formed surplus of Russian products, formed as international sanctions and restrictions started to squeeze deliveries to traditional buyers in Europe and the US, forced Russia to find alternative consumption markets and sell cargoes at significant discounts to benchmark prices.

"Russia has a limited storage capacity for its product surplus and is forced to sell on the cheap", a trader said. "Discounts are steep enough for buyers to make profit, despite long journeys, especially from the ports in the Baltic to the Middle East."

Rising imports by the Middle East are led by high-sulphur fuel oil (HSFO) — over 498,000t of HSFO landed in September, below 750,000t the previous month.

The UAE was the top destination for Russia-origin supplies, receiving 574,000t of products, down from 1.05mn t in July and 904,000t in August.

Imports of Russian HSFO into Fujairah fell to 86,500t in September from 345,000t in August.

Saudi Arabia was the second largest importer of Russia-origin oil products, with 412,000t of HSFO in September, up from 398,000t in August.

Gasoline and naphtha imports stood at 170,000t and 119,600t, respectively.

To reflect the changing trading flows and provide efficient price discovery mechanisms for buyers of Russian cargoes, Argus will start publishing price discounts of Russian-origin oil products against international market prices in its Argus Mideast Gulf and Indian Ocean (AMGIO) weekly report from 25 October.

By Elshan Aliyev

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

06/01/25

German fuel prices rise with new GHG quota, CO2 levy

Hamburg, 6 January (Argus) — Prices for road fuels and heating oil in Germany rose at the start of the year as a result of an increased greenhouse gas (GHG) quota and CO2 levy, as well as higher Ice gasoil futures. Many filling stations are replenishing stocks, and low temperatures have led to more heating oil orders. German wholesale prices for heating oil, diesel, and gasoline increased because of a 1.25 percentage point increase in the GHG quota and a €10/t CO2 increase in the CO2 levy, which came in on 1 January. The increase in heating oil was €4.94/100l, in diesel €6.79/100l, and in gasoline €5.36/100l. Heating oil is excluded from Germany's GHG mandate. This price rise roughly matches Argus ' estimates from December. But higher Ice gasoil futures since the turn of the year led to a bigger price increase than originally expected. Lower gasoil imports from east of Suez into the Amsterdam-Rotterdam-Antwerp (ARA) hub in December are lending support to futures. Heating oil consumer stocks are on average 57pc full nationwide, but more was ordered in the first week of the new year than many traders had expected. Traders reported deal volumes of nearly 13,000m³ on January 2, the highest for a day since 15 December. One reason for this is the cold weather that has hit many regions in Germany, another is the price increase at the beginning of the year, which has boosted buying interest. Many market sources said diesel demand will only begin to pick up from the second half of January. Many wholesalers had sufficiently stocked up in December in expectation of the increased GHG quota and CO2 levy. Diesel stocks of commercial consumers were at a 12-month high of just under 59pc on 1 January, according to Argus MDX data. But stockbuilding towards the end of 2024 does not seem to have had a dampening effect on demand from filling stations. These are being resupplied since 2 January, and daily diesel amounts reported to Argus on that day were the highest since 19 December. Ship owners on the Rhine river said business will not fully resume until the second week of the year, and they expect January to remain quiet because of wholesalers' high diesel stocks. Importers' anticipated restocking with biodiesel will also not initially lead to price pressure, as the Rhine is deep enough for transit. By Johannes Guhlke Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Indonesia’s Pertamina launches B40 bunker prices

06/01/25

Indonesia’s Pertamina launches B40 bunker prices

Singapore, 6 January (Argus) — Indonesia's state-owned refiner Pertamina issued posted bunker prices for 40pc biodiesel blend (B40) for the first time on 6 January, in line with the country's mandate . Pertamina issued B40 prices today for five locations — Jakarta, Benoa, Surabaya, Balikpapan and Batam. They are effective for the first two weeks of January. The prices issued by Pertamina are for a blend of 500ppm (0.05pc) sulphur marine gasoil (MGO) and palm oil-based biodiesel . Prices were posted at $1,103/t for the port of Jakarta, $1,085/t for Benoa, $1,049/t for Surabaya, $1,087/t for Balikpapan and $910/t for Batam. Indonesia's biodiesel sector has been preparing for the transition from B35 to B40 on 1 January . Biodiesel producers have been given until the end of February to make the transition to B40 blends for all sectors. Pertamina produces three kinds of MGO at its refineries, two grades with 500ppm sulphur content and a third grade with 50ppm. By Mahua Chakravarty Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Viewpoint: Asia bitumen supply to rise, demand mixed

06/01/25

Viewpoint: Asia bitumen supply to rise, demand mixed

Singapore, 6 January (Argus) — Increased bitumen exports from south China could boost supplies in southeast Asia this year, but increased consumption is only expected in a few key Asian economies in 2025. Pent-up demand from previously incomplete projects in 2024 could bolster near-term buying interest. Projects in key Vietnamese, Indonesian, and Chinese markets were delayed in 2024 because of inclement weather and government funding issues, with some project cancellations in Indonesia. Overall demand in Australia was also lacklustre because of limited funding amid high inflationary pressure. This was exacerbated by higher import costs in the third quarter of 2024 when demand outpaced supply. Strong high-sulphur fuel oil (HSFO) prices and weaker export margins curbed bitumen production in key exporting countries, including Singapore, South Korea and Thailand since the second quarter. This is likely to change in 2025 with production expected to return to more typical levels, sources close to southeast and northeast Asian refiners told Argus . Higher export availability from south China, especially from independent refiner Chambroad's 80,000 b/d refinery in Hainan, could limit import demand for cargoes from other exporting regions, market participants added. The Hainan refinery has plans to export around 400,000-500,000t in 2025. A 270,000 b/d refinery located in peninsular Malaysia, which refrained from producing bitumen since mid-2024, is likely to resume operations in 2025. The 175,000 b/d Map Ta Phut refinery in Thailand, which prioritised fuel oil production in 2024, is also likely to increase bitumen output this year, adding to the overall export supply pool. "If you compare current HSFO and bitumen prices, they are at very similar levels. From a margins perspective, the refiners have little reason to cut bitumen production," a southeast Asian trader said. "[But] if demand is not sufficient enough to absorb the supplies, they may have to cut output." Meanwhile, global trading firm Vitol's 50,000-70,000t bitumen storage facility in Malaysia's Tanjung Bin is expected to be operational in 2025. This would increase the volume of imported cargoes and enable inter-regional arbitrage . But whether the inventories would mainly cater to the Asian market has yet to be determined. Demand prospects mixed Chinese consumption expectations are mixed. This year is the final year of China's five-year economic plan and the government is set to turn its focus toward infrastructure investment, which typically drives bitumen consumption. The recent monetary policy announcement may also support demand. But market participants are unsure if the policies will be enough to stabilise the real estate sector. Higher domestic output will also weigh on import demand. Vietnamese consumption is expected to accelerate in 2025 as many projects were delayed because of prolonged funding issues. At least one importer estimates that consumption will rise by 20-30pc on the year to around 1.2mn-1.3mn t as funding issues are anticipated to subside. Thai and Malaysian demand in 2025 is expected to be similar to 2024 levels, with a stable number of projects and likely no change in policies. Consumption is anticipated to increase by at least 5pc on the year in New Zealand. But importers from neighbouring Australia expect a 10pc drop on the year with few large projects and most maintenance works limited to filling potholes, and budget availability still uncertain. Demand is also unlikely to increase in Indonesia as infrastructure funds will remain tight, given that the recently elected government will continue to prioritise financial support programmes and social initiatives, southeast Asian traders told Argus . Logistical constraints to extend Bitumen vessel availability was tight in the last quarter of 2024 and is likely to persist into the first quarter of 2025. Weak demand and reduced production have weighed on liquidity in the second half of 2024, which caused some vessels from Asia to move to other regions. But vessel tightness is likely to ease in the second half of 2025, as several new 8,000 dead weight tonne (dwt) and a few larger vessels around 16,000-17,000 dwt are likely to be delivered in this year, market participants said. There are far fewer new builds for smaller 5,000 dwt vessels, which may indicate an atypical shift towards larger ships to transport bitumen in Asia. By Sathya Narayanan, Leanne Tan, Claire Ng, and Chloe Choo Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US Congress begins with focus on energy, taxes

03/01/25

US Congress begins with focus on energy, taxes

Some Republicans worry that their razor-thin House majority could soon see their caucus fractured, writes Chris Knight Washington, 3 January (Argus) — The new Republican majority in US Congress has set its sights on passing legislation to grow energy production, unwind climate policies and cut trillions of dollars in taxes, but doing so will require the party to overcome its history of infighting. That disharmony was on display last month, when Republicans in the House of Representatives nearly forced a government shutdown by scuttling a spending deal negotiated by their own leaders. Similar dynamics have been at play for the past two years, as rifts over how to govern made it difficult for House Republican leaders to use a tiny majority to extract policy concessions during negotiations. The first test of party unity in the 119th Congress — sworn in on 3 January — will come as House Republicans vote on whether to re-elect Mike Johnson as speaker with an even smaller majority than last year. Johnson can only afford to lose a handful of votes, assuming all Democrats vote against him, before Republicans risk a repeat of 2023, when far-right members ousted the last speaker but could not agree on a replacement for weeks. A lengthy voting impasse could delay the 6 January certification of the election victory of president-elect Donald Trump, who this week endorsed Johnson. Trump campaigned on passing legislation to allow industry to "drill, baby, drill" by increasing federal oil and gas lease sales, removing regulations and unwinding parts of outgoing president Joe Biden's signature Inflation Reduction Act (IRA). Among the options are rescinding a fee on methane emissions that started at $900/t, and requiring more oil and gas lease sales in the US Gulf of Mexico. On taxes, Trump has proposed extending $4 trillion in cuts due to expire at the end of 2025, in addition to cutting corporate rates to as low as 15pc from 20pc, rescinding clean energy credits, and putting a 20pc tariff on all imports. Other items on Congress' to-do list include passing legislation to fund the government and raising the statutory limit on federal debt. Republicans also say they want to pass a bill to expedite federal permitting, after a bipartisan effort to do so failed to advance in December. Learning to two-step Republican leaders have floated a two-step plan to pass Trump's legislative agenda that would use "budget reconciliation" — a legislative manoeuvre that will prevent a Democratic filibuster in the Senate, but which limits the bill to provisions that will affect the federal budget. Senate majority leader John Thune, a Republican from Texas, has suggested packaging immigration, border security and energy policy into a first budget bill that would pass early this year. Republicans would then have more time to debate a separate — and far more complex — budget bill that would focus on taxes and spending. But some Republicans, mindful of a slim 220-215 House majority that will temporarily shrink because of upcoming vacancies, worry the two-part strategy could fracture the caucus. Republicans have yet to decide the changes to the IRA, which includes hundreds of billions of dollars of tax credits for wind, solar, electric vehicles, battery manufacturing, carbon capture and clean hydrogen. A group of 18 House Republicans last year said they opposed a "full repeal" of the law, which disproportionately benefits districts represented by Republicans. Republicans plan to use their expanded influence to push changes at all levels of government and the work it supports. Incoming Republican chairman of the Senate energy committee John Barrasso has issued a report urging OECD energy watchdog the IEA to revive the inclusion of a "business-as-usual" reference case in its annual World Energy Outlook. Barrasso says the IEA has lost its focus on energy security and instead become a "cheerleader" for the energy transition. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Viewpoint: India bitumen demand growth prospects mixed

03/01/25

Viewpoint: India bitumen demand growth prospects mixed

Singapore, 3 January (Argus) — Prospects of India's 2025 bitumen consumption growth are mixed, as state governments' delayed disbursement of project funds are likely to persist and weigh on demand while the many incomplete projects could boost consumption. India is a net bitumen importer and the biggest consumer of Middle East origin bitumen, especially from Iran. India's bitumen consumption had touched record highs in 2022 and 2023 and surpassed 8mn t/yr, despite prolonged payment delays, as importers had offered atypically longer credit terms to road contractors. All importers and traders are "struggling with payment recovery", an Indian importer said. Many contractors are demanding credit as several state governments have not released funds, the importer added. "Demand is not bad, but it really depends on funding. Demand won't increase by a lot [next year], but it should be quite stable [to 2024]." High inventory pressure forced importers to offer atypically bigger discounts to liquidate cargoes, which squeezed their profit margins, especially as import costs increased given a supply crunch in Iran. But there is no dearth of projects as many were delayed because of funding constrains, importers said. Some state-controlled refiners anticipate consumption to grow next year, albeit marginally. Refiners were previously forced to offer larger discounts against listed values to attract more customers, which weighed on their profit margins this year. This could continue into 2025 would ultimately pressure refiners to reduce bitumen output and increase production of other higher valued oil products. Indian refiners typically produce around 5mn t/yr, which accounts for around 55-60pc of total bitumen consumption. "We are only expecting a 3-4pc increase in demand on year as no new major road projects have been announced, so it is hard to see a larger growth," a source close to a state-refiner said. "But imports will increase if we reduce production, given growth will still be in [the] positive. So next year will not be that fantastic in comparison and there would not be any capacity augmentation for bitumen." This indicates that the central government's expectation that Indian bitumen consumption will rise by 14pc on the year to 10mn t during the ongoing financial year ending March 2025 could be at risk. Limited Middle East exports Vacuum bottom feedstock supply has been erratic in Iran, and feedstock transportation from national refineries to private bitumen producers has also been delayed this year, which market participants expect to persist in the coming year. This will limit feedstock availability and in turn bitumen output, increasing export cost especially for higher priced VG40 grade, which is imported by India. Tight supply has also increased congestions at the Bandar Abbas port, forcing vessel owners and importers to incur higher demurrage, increasing costs and weighing on import appetite. There are also fears that the new Trump administration may impose more sanctions and other political measures on Iran next year, further clouding the export outlook. Iranian central bank's recent announcement to phase out the Nima foreign exchange platform has increased uncertainty on the rials' value against the US dollar as importers and exporters will now have to trade based on mutually agreed exchange rates, with the free market rate still depressed. Meanwhile, Baghdad's recent directive to stop oil and other oil products from entering Iran, unless the exports are licensed by state-owned Somo, could also limit drummed bitumen exports as bitumen producers do not typically possess a Somo licence. Iraqi drums are generally transshipped out of Bandar Abbas. The recent upgrade of Bahrain's state-owned Sitra refinery to 380,000 b/d from 267,000 b/d will primarily boost middle distillate and naphtha output, weighing on bitumen production. Middle East cargoes are also typically exported to southeast and east Asia during low demand periods in India. Seaborne prices in Asia rose to multi-year highs in 2022 and import appetite for relatively cheaper Middle East-origin bulk cargoes increased, which continued in 2023. Appetite from Asia this year was mostly from China and Vietnam, as other buyers preferred Asia-origin cargoes because of compatible specifications and proximity. "The Middle East-Asia arbitrage is closed, and we will see very little-to-no cargoes from the UAE to Asia," a southeast Asia-based trader said. This is because Middle East-origin cargo cfr prices are not likely to be competitive to Asian cargoes, with supply and loading constraints in Iran adding to the uncertainties. By Maedeh Mazinani, Sathya Narayanan and Chloe Choo Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more