Russia hiked its fuel oil and vacuum gasoil (VGO) exports to India and Turkey in May as buyers preferred to purchase more fuel oil amid falling prices, according to shipping and trade data reviewed by Reuters.
Russia’s oil products have been banned in the EU and other Western countries since 2023, so Moscow redirected most of the shipments to Asia and the Middle East.
Saudi Arabia has emerged as the top buyer of Russia’s fuel oil as it is taking advantage of discounted prices to use the fuel for summer electricity generation.
But Russian exports to Saudi Arabia dropped by 17% in May from the previous month, per data from LSEG cited by Reuters.
The Kingdom remained the biggest buyer of Russian fuel oil last month, with 700,000 tons imported.
India, however, came a close second as Russian fuel oil shipments almost doubled in May compared to April, to 600,000 tons.
With falling fuel oil prices, India boosted these supplies at the expense of some Urals crude shipments from Russia. India uses fuel oil and vacuum gasoil as alternatives for feedstock at refineries.
Russia hiked its fuel oil exports to Turkey, too—by 75% from April to 430,000 tons in May.
Oil revenues for Russia tumbled in May to a two-year low after international crude oil prices collapsed in early April and in May amid concerns about global economic growth with the tariff fallout. Concerns also abounded about oversupplied markets with OPEC+’s decision to boost production at higher monthly rates than previously expected, as the group is unwinding the output cuts.
Russia’s revenues started to decline significantly in April with the crash in oil prices.
In May, oil and gas revenue for Russia’s budget totaled $6.5 billion (512.7 billion rubles), a plunge of over 35% compared to the same month of 2024. The revenue was the lowest since June 2023, according to Bloomberg calculations.
By Charles Kennedy for Oilprice.com
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