Russian base oil exports plunged more than 20 percent to around 700,000 metric tons in the first nine months of 2016, hampered by a supply glut in Europe, according to a consultancy.
Russia is traditionally a swing supplier of base oils to the rest of Europe and at times has accounted for significant portions of the regions demand. In the first nine months of 2013, Russian base oil refiners, which have combined capacity of approximately 2.4 million tons per year, exported about 1.2 million tons, around the same volume as the same period of 2012, said Dmitry Terentiev, business development manager at Argus Medias office in Moscow.
The supply glut in Europe coming from the Middle East and Asia decreased the Russian base oil exports to above 1 million tons from January through September 2014, Terentiev told RPIs Lubricants Russia conference held in Moscow in November. The shifted geopolitical situation, the hostilities in Eastern Ukraine and the international sanctions that were imposed were unfavorable for the Russian petrochemical industry in the years to come.
The country exported approximately 900,000 tons of base oil in 2015s first three quarters and around 700,000 tons in the same period in 2016.
The firm found that the largest part of the Russian base oil exports in 2016, or 260,000 tons, went through ports on the Baltic Sea, including 89,000 tons destined for Lithuania, Latvia and Estonia. Black Sea ports handled 188,000 tons during the same period. In 2016, Eastern Europe imported 116,000 tons of Russian base oils, while Central and Eastern Asia imported 75,000 tons and 67,000 tons respectively, Terentiev said, adding that Nakhodka, a port city on the Sea of Japan in the Russian Far East, handled almost 30,000 tons. The rest, or 138,000 tons, went to other destinations.
Argus also found that in 2016 Russia shipped 247,000 tons of [API] Group I base oil using sea routes (floating storage units), 7 percent more compared to the year before.