Russia may try to push greater volumes of a key oil product into Asia, possibly blending some with crude oil, in a bid to find alternative markets as European sanctions tighten, according to FGE.
More Russian-made naphtha -- a fuel primarily used to make plastics -- is likely to head into hubs such as Singapore and Fujairah from February when EU sanctions kick in, said Armaan Ashraf, global head of natural gas liquids at the consultancy. Re-exports from these regions could become common as some buyers shy away from direct imports from Russia, he said in an interview.
Moscow’s invasion of Ukraine has caused turmoil across energy markets this year, and that disruption is set to extend into 2023. A European Union ban on most flows of Russian crude will start in December, followed by a similar move against products including naphtha about two months later. While the Energy Information Administration expects Russian crude output will drop as a result of the curbs, local refineries will still need to find outlets for their naphtha.