Satellite tracking of oil cargoes by market reporting group OPIS shows that Europe’s dependence on Russia for road fuels in the 28 member countries has deepened significantly. Diesel imports from Russia are at a record in the first eight months of 2014, with Germany the most reliant, followed by France, and then the UK. Ultra-low-sulphur diesel exported from Russia to Europe surged 55% from January to August, compared to the same period last year, displacing India as the second-largest importer after the US.
The increase signals a fundamental shift in how Europe meets a rising deficit in the motor transport fuel, OPIS commented.
Russia exported around 10.3 million metric tons to Europe from 1 January to 31 August this year, according to data compiled by OPIS from European Commission (Eurostat) trade data and satellite tracking of vessels. Volumes compare to 6.7 million tons shipped to the continent and UK from January to August in 2013, based on EU trade data.
Some 3.61 million tons of Russian ULSD came into Europe aboard 127 vessels from June to August, mainly from the port of Primorsk, according to the OPIS Europe Diesel Tanker Tracker.
Eurostat shows that 3.92 million tons of ULSD was imported into the 28 member countries from Russia between January and March this year, the highest quarterly total in data going back to 1988.
The significant increase reflects the modernization of Russian refineries, with diesel exports forecast to rise to 27 million tons a year by 2017, from 17 million tons in 2012, based on estimates from Rosneft, the country’s biggest oil producer.
OPIS arrived at its calculations by adding Eurostat trade figures for January to May, the most recent available, to data collated from the OPIS Tanker Tracker in June, July and August.
Russia’s Lukoil is the biggest supplier of ULSD to Europe, supplying just over a quarter of all the middle distillate (some 942,000 tons or around 7 million barrels) shipped to the region. Surgutneftegas was the second-largest (576,000 tons), followed by Gazprom Neft (532,000 tons).
Europe’s demand for ULSD is rising: net middle distillate import requirements for the region are forecast to grow to 1.6 million b/d by 2019, from just over 1 million b/d in 2013, the International Energy Agency (IEA) said in its Medium-Term Market Report 2014, released in June.