India stepped up vacuum gasoil (VGO) exports to the US this 12 months in an uncommon commerce circulation for the oil product because the West seeks options to switch Russian provides, in keeping with merchants and knowledge analytics corporations.
America and Canada banned Russian oil imports over Moscow’s invasion of Ukraine, whereas sanctions from the European Union on Russian crude and oil merchandise imports will take impact on Dec. 5 and Feb. 5, respectively.
In the meantime, India, the world’s third-largest oil importer, has been ramping up Russian crude imports and rising oil product exports to the West for increased margins.
Within the newest transfer, international oil merchants Vitol and Trafigura have purchased one cargo of VGO every from Indian refiner Nayara Power in tenders at premiums starting from $10 to $15 a barrel to Dubai crude quotes, market sources mentioned.
At these premiums, the cargoes, to load from India’s Vadinar port in December, are prone to head to the US or Europe, mentioned the sources.
Previous to this, Aframax tanker Shanghai Daybreak loaded a minimum of 80,000 tonnes of VGO from Reliance Industries Ltd’s Jamnagar port, arriving in the US in late October to early November, delivery knowledge from Vortexa and Refinitiv confirmed.
Nayara Power, Reliance and Vitol didn’t reply to requests for feedback. Trafigura doesn’t touch upon particular person shipments, a spokesperson mentioned.
Graphic: India-US VGO – https://fingfx.thomsonreuters.com/gfx/ce/myvmomzxgvr/India-US VGO.png
India’s VGO exports to the US climbed in 2022 in contrast with final 12 months. Just one cargo loaded from India to the U.S. in Might 2021, Vortexa knowledge confirmed, whereas there have been no such fixtures final 12 months in keeping with Refinitiv knowledge.
VGO is generally used as a refinery feedstock to provide different merchandise corresponding to gasoline and diesel. Russia was a key VGO provider to U.S. refiners earlier than the Ukraine struggle broke out.
“On condition that the U.S. just isn’t shopping for Russian oil, they’re searching for any and all options,” mentioned Roslan Khasawneh, senior gas oil analyst at Vortexa.
“The weird exports to the U.S. had been additionally probably inspired by Indian refinery upkeep and weak gentle distillate margins,” he mentioned.
US and EU sanctions don’t apply to sophisticated merchandise produced from Russian crude exported from a 3rd nation as they don’t seem to be of Russian origin.
In India, refiners boosted imports of discounted Russian oil to 793,000 barrels per day between April and October, up from simply 38,000 bpd in the identical interval a 12 months in the past, commerce knowledge confirmed. Reliance accounts for about 23% of the purchases and Nayara’s share is about 3%.
Listing of vessels which have loaded VGO from India to the U.S. within the 12 months to date:
Vessel Grade Quantity (KT) Loading Port Loading Date Discharge Port Arrival Date
SHANGHAI DAWN VGO 97.70 Jamnagar 23/9/2022 Port Allen 31/10/2022
CHEMTRANS NAOS VGO 49.00 Vizag 23/8/2022 Los Angeles 8/10/2022
MINERVA ZENOBIA VGO 23.70 Jamnagar 11/5/2022 Port Arthur 6/7/2022
(Apart from the headline, this story has not been edited by NDTV workers and is printed from a syndicated feed.)
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