Russia may ship greater volumes of a key oil product to Asia, Bloomberg reported on Wednesday, citing the energy consultancy FGE.
The consultancy’s global head of natural gas liquids, Armaan Ashraf, told the outlet that more Russian-made naphtha fuel, which is primarily used to make plastics, will likely head to hubs such as Singapore and Fujairah starting next February when EU sanctions take effect. Re-exports from those regions could become common as some buyers may be reluctant to import directly from Russia, he explained.
Preliminary data by analytics provider Vortexa showed that Russian naphtha exports to Asia have soared by 84% in August to about 130,000 barrels a day compared with all of July.
According to Ashraf, Russian naphtha may already have been blended into the country’s Urals crude and shipped to India earlier this year. “The blending of heavy full-range naphtha or heavy naphtha in limited quantities could reap much more benefits versus selling the naphtha cargo directly,” he noted.
Citigroup estimates that Russian flows of crude oil and oil products may decline by about 1.25 million barrels per day when the EU’s latest curbs come into force.
The bloc’s embargo of most flows of Russian crude will begin in December, followed by a similar move against oil products, including naphtha, about two months later.
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