European diesel and gasoil imports from Russia fell by around 21pc on the month in September to their lowest since November 2018, as more European buyers avoid Russian product.
Europe imported around 2.3mn t of Russian diesel and gasoil in September, down from 2.91mn t the previous month and 2.66mn t in September last year, according to Vortexa data.
In September, the share of Russian diesel in the European market also fell, to around 40pc from around 50pc the previous month. In recent years, Russia contributed around 50-60pc of European diesel and gasoil imports and in 2020 and 2021, the share of Russian product in the European diesel and gasoil market averaged 53pc and 56pc, respectively.
In the same period, Europe imported on average around 2.87mn t and 2.91mn t of diesel monthly, respectively. In the first half of this year, the trend remained similar, with imports from Russia averaging over 2.92mn t/month before rising to 3.3mn t in July, probably because of peak seasonal demand.
But in the following two months, imports fell by around 12pc and 21pc, respectively, probably as European buyers started to replace Russian volumes, after avoiding them in the spot market and reduced their Russian term contract volumes because of low demand for them. Market participants also confirmed that buyers that were still picking term contract volumes from Russia were keeping them in storage in the Amsterdam-Rotterdam-Antwerp (ARA) area because the majority of traders were avoiding Russian products.
Over recent weeks, market participants have been showing concerns that Russian diesel and gasoil loadings for Europe might fall in October, as the country's traders might send the product to Africa and other regions in order to establish new buyers ahead of the EU's ban on Russian oil products at the start of 2023. This would mean lower volumes of Russian product arriving in Europe in the coming weeks, ahead of the ban.
Aside from the loading volumes from Russia, overall oil output from Russia could take a temporary but signification hit from the effects of the proposed G7 price cap on Russian oil, Russian deputy prime minister Alexander Novak told Bloomberg TV on 5 October. Novak had already projected that Russian crude and condensate output will fall by 8pc in 2023.
With the EU's embargo on Russian oil products fast approaching, Europe will probably see higher volumes of diesel and gasoil arriving from Saudi Arabia, India, the UAE and the US to fill the gap left by missing Russian volumes, according to market participants.
Some market participants also said that Europe will probably start seeing a higher number of Long Range 2 (LR2) vessels arriving in the coming months as Russian imports drop further.
