Russia's seaborne fuel exports drop a third after drone strikes

Russia's seaborne exports of refined oil products declined by one-third in July compared to June, according to Reuters on August 4, 2023. This decline in fuel production stemmed from Ukrainian drone strikes on Russian oil refineries and Russian export restrictions. In July, total exports of diesel and gasoil from Russian ports decreased by roughly 60% from June, reaching approximately 750,000 tons.

Furthermore, seaborne exports of naphtha, a refining byproduct derived from crude oil distillation, fell by 35% in July to around 800,000 tons due to strong domestic demand for gasoline. Dark oil products, which include fuel oil and vacuum gasoil, made up approximately 60% of Russia's seaborne refined product exports in July. However, combined exports of these two products decreased by about 21% in July compared to June, to 2.3 million tons.

Traders expressed concern that the decline in fuel exports from Russian ports could exacerbate fuel shortages in key markets such as Asia, the Middle East, Turkey, and Brazil. These regions have become the primary buyers of Russian fuel exports since the European Union imposed a ban on Russian oil product imports in February 2023.

In response to the Ukrainian drone strikes, the Russian government extended its gasoline export ban by six months, until January 31, 2027, and extended its diesel export ban by one month, until August 31, 2026.