NWE raised Russian gasoil imports in 1H

Russia was the only major supplier of diesel and gasoil to northwest Europe to increase shipments in the first half of the year, with notable rises in January and February before European demand was squeezed by Covid-19.

Russia shipped 10.1mn t of gasoil to northwest Europe in the January-June period, according to oil analytics firm Vortexa, up from 9.5mn t a year earlier. This pushed Russia's share of all northwest European diesel imports to 68pc from 50pc in the same period last year, also reflecting a sharp fall in demand from the travel and industrial sectors caused by Covid-19 lockdown measures.

Russian refineries carried out a lot of maintenance work in 2019 ahead of the introduction of marine fuel regulation at the start of this year, which meant a smaller upkeep programme and relatively strong production this year. Diesel loading schedules at the Baltic Sea port of Primorsk in January were the highest for any month in at least five years, and the port contributed almost half of northwest Europe's gasoil imports in the first six months of this year.

It was clear in February that northwest Europe was growing more dependent on Russian diesel than at any time in the previous four years.

At the same time, Saudi Arabia — northwest Europe's second-biggest supplier of gasoil products — only sent 2mn t in the January-June period, less than half of what it sent a year earlier. This was because of a heavy refinery maintenance schedule in the first few months of the year.

Overall Russian diesel exports in the first half of the year were around 60,000t a week more than than a year earlier, which is mostly accounted for by 30,000-40,000t a week higher production, according to the energy ministry's information service CDU-TEK.

Margins between diesel cargoes delivered to Le Havre in northern France and North Sea Dated crude rose to more than $20/bl in March as a steepening contango structure in Ice gasoil futures incentivised buying-for-storage. This helped to pull even more Russian diesel into the region.

Overall, northwest European imports of gasoil and diesel fell to 14.8mn t in the first half of this year from 19mn t a year earlier.

By Benedict George