Trade and shipping data revealed that Russia increased its seaborne fuel oil exports and vacuum gasoil to India and Turkey during May, as the falling oil prices attracted buyers and the hot summer season demanded more fuel.

The oil price fell to its lowest level in four years as OPEC+'s decision to increase production stoked concerns about a rising global supply during a period of uncertain demand.

As of February 2023 when the European Union's embargo on Russian oil was fully implemented, Asian countries are now the primary destination for Russian fuel oil and VGO.

According to LSEG, the dirty oil product loadings from Russian port to India nearly doubled from April to 0.6 metric tons.

India imports straight run fuel oil and VGO as an alternative to Urals crude in its refinery's feedstock pool.

Reliance Industries of India and Nayara Energy, a subsidiary in the country, imported 37% less Russian oil and 3% more Russian oil respectively last month than they did in April.

Shipping data shows that in May, Russia's seaborne fuel and vacuum gasoil imports to Turkey increased 75% from the previous month to 0.43 millions tons.

Saudi Arabia, the largest importer of Russian fuel oil by sea last month, although loadings dropped 17% compared to April. They reached 0.7 million tonnes. Since 2023, the country has been importing discounted Russian fuel oil to meet summer demand. Prices have fallen due to an EU embargo against imports of oil products from Russia.

According to LSEG, Singapore and China were among the top destinations of Russian fuel oil and VGO supplies in May.

In May, Russia's fuel supplies to Asia through the African Cape of Good Hope dropped to 85,000 tons. This is the lowest level seen since the beginning of the year.

Since December 2023, traders have diverted Russian oil product cargoes to Africa to avoid the Red Sea because of a higher risk of attack by Yemen's Iran aligned Houthi Group.

It is possible that the escalation in military attacks between Iran and Israel will also force shipowners not to use Red Sea routes when traveling to Asia. (Reporting and Editing by Sonia Cheema).

(source: Reuters)