May 16, 2023
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Tankers transporting Russian oil have reportedly settled at ports close to Singapore and Malaysia as significant volumes of the Kremlin’s crude move to Asia ahead of the most recent slate of the EU sanctions.
Data gathered from Vortexa and as cited by Bloomberg reflected approximately 1.1 million tons of high-sulfur fuel oil had been sitting on vessels for the week that ended 24 October. The volume of crude is lower than previous record highs but is double the level recorded at the same time in 2021.
Nearly 65% of Russia’s fuel oil flows sailing toward Singapore eventually ended up in floating storage tankers close to the port of Tanjung Pelepas, Malaysia, in the past three months, per Vortexa.
High-sulfur oil is considered to be quite dirty. It is used mainly for fueling vessels with pollution-reduction equipment or power generation. Most tankers have gradually moved away from depending on it as the broader industry deployed measures in 2020 to minimize emissions.
But with the new EU sanctions, Russia is more likely to lean toward Asia as an export market. The next round kicks in on 5 December. It also includes a ban on insurance for tankers transporting Russia’s oil to destinations outside the EU.
Singapore is a crucial export and refuelling hub for crude and a jumping-off point for ship-to-ship transfers. Traders have employed this tactic since Moscow’s war on Ukraine to hide Russia’s crude for export.
References: Business Insider India, SCMP
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