Ukrainian drone attacks push exported oil to a historic low point
In the dynamic world of global energy markets, Russia's oil product exports have witnessed a significant shift. Russian officials are contemplating an extension to a fuel export ban, which could potentially impact both domestic and international fuel markets. The average daily export of oil refining raw materials, such as vacuum gas oil, has plummeted to 53,000 barrels per day, a stark decrease from previous periods.
This decline is further highlighted in the first half of September 2023, where oil product exports dropped by 300,000 barrels per day compared to the same period in 2022-2024. The export of diesel and gasoline currently stands at around 699,000 barrels per day, a 12% decrease from the previous month. Notably, the export of jet fuel has reached a historically low level, with exports hitting a yearly record low of 10,000 barrels per day.
However, the average export volume of fuel oil in September 2023 was 835,000 barrels per day, the highest level since April 2023. This redirection of diesel fuel volumes to the domestic market could lead to increased domestic fuel availability.
The persistent decline in oil product exports could be indicative of the impact of Ukrainian drone strikes on Russian oil infrastructure. Reports suggest that Ukrainian drone strikes have targeted Russian oil refineries, potentially disrupting the flow of exports.
If the current trend persists, the average oil product export figure for September could be the lowest since 2022, marking a significant drop since the start of the full-scale invasion, with Russian oil product exports reaching a minimum during this period.
In response to the decreasing exports, Russian Deputy Prime Minister Alexander Novak and Energy Minister Nikolai Shulginov are involved in contemplating an extension to gasoline exports until October. Meanwhile, Russian officials are urging producers to redirect diesel fuel volumes to the domestic market.
Asian countries, particularly India, have been the primary buyers of fuel oil. However, with the ongoing changes in export patterns, the future of these trade relationships remains uncertain.
Amidst these shifts, energy companies in Russia are reorienting towards the domestic market, aiming to meet the growing demand within the country. The potential extension of the fuel export ban could further solidify this focus on the domestic market.
As the situation unfolds, it is crucial to closely monitor these developments to understand the implications for both the Russian and global energy markets.
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