MOSCOW: Lower output and “other reasons” caused fuel oil exports from Russia to fall 15.6 percent in January compared to December 2015. According to that nation’s energy ministry data and Reuters calculations, lower crude prices plus weaker global and domestic demand for middle distillates resulted in Russian oil refinery runs dropping 4.7 percent to 275,584 barrels per day in January.
But these same low prices caused an increased demand for fuel oil among Russian utilities, which normally rely on natural gas that is supplied under long-term contracts at fixed prices. These same low prices caused an increased demand for fuel oil among Russian utilities
In sharp contrast to its December export supplies of 124,023 tonnes, Taif-NK in January put all of its fuel oil shipments on the domestic market; meanwhile, fuel oil export supplies at Taneco refinery decreased by 91.3 percent to 9,628 tonnes, compared to 110,570 tonnes in December. Some companies were said to be delaying exports in order to benefit from a $42.60 per tonne duty (the rate as of February) instead of $60.10.
Overall, domestic fuel oil supplies in Russia rose 10.2 percent, but local shipments of gasoline and gas oil fell by 15.6 percent and 17.8 percent respectively on a monthly basis. Year on year, Russia’s January gasoline export supplies were up by 20.1 percent, while gas oil and fuel oil export shipments fell by 7.9 percent and 25.8 percent, respectively.
In the long term, Russia is eyeing Asia as a huge exporting target – at least for crude oil; last fall, Alexander Novak, the country’s energy minister, said he expects 30 percent of all crude oil exports to be sent there as early as 2020.
