India looks set this month to buy its largest amount of dirty fuels from Russia for many years. A steep decline in flows of crude oil, added to the prospect of refinery maintenance in the near future, were threatening supplies.
August imports of sludgy products from Russia were likely to double in August compared with July, , according to initial data compiled by Bloomberg from analytics firm Kpler. That would be the most since at least early 2017.
The flows will comprise mainly high-sulphur fuel oil (HSFO) and vacuum gasoil, which can be used in secondary refining units to improve yields of higher-value products such as diesel and gasoline.
Imports of Russian crude by India have declined in the wake of cuts in output. That means India has less to refine into dirty products, which in turn has led to it importing more from Russia. In addition, maintenance at Indian refineries is scheduled for the near future, which might affect sludgy fuels production. Andon Pavlov, lead analyst for refining and dirty products at Kpler, told Bloomberg that the upcoming refinery maintenance in India was set to put a lid on total primary processing capacity in September and October.”
A drop in this primary refinery unit capability might limit the production of the residual fuels.
India’s crude imports from Russia and other OPEC+ members, including Saudi Arabia, have declined in recent months amid voluntary production cuts by the bloc. This has tightened Indian refiners’ access to fuel oil-rich varieties of heavy or medium sour crudes, which in turn has reduced the feedstock to the Indian upgrading units that optimize clean fuel output.
Most of the shipments expected to arrive in India this month will have left Russian ports in July.
Source: Insurance Marine News 14th August 2023