Russian naphtha flows shift to ship-to-ship transfers under sanctions pressure

According to LSEG data, of the three cargoes loaded at Russia’s Baltic Ust-Luga port in December, two — totalling around 100,000 tonnes — were discharged in India in early February. The third, a 23,000-tonne shipment, is still waiting for discharge.

Exports of naphtha from Russian ports to Venezuela have also fallen to zero this year after US President Donald Trump in December ordered a blockade on all sanctioned oil tankers entering or leaving the Latin American country. Venezuela uses naphtha to dilute its extra-heavy oil to make it transportable.

LSEG data shows that of the tankers loaded with naphtha at Russian ports in December, one cargo initially destined for Venezuela is still drifting awaiting orders, while another 60,000-tonne shipment has been redirected to Oman.

With major buyers stepping back from Russian supplies, traders have increasingly turned to STS operations near Port-Said, Egypt, as well as storage hubs in Singapore, Fujairah in the United Arab Emirates and Malaysia, shipping data shows.

Barrels held in storage could be blended and resold into Asian and African markets, market sources said. Traders also note rising naphtha shipments from the Russian ports to Brazil and Togo, where they are mainly used for gasoline blending, though some volumes may also be stored and re-exported.

(Reporting by Reuters in Moscow with additional reporting by Mohi Narayan in New Delhi. Editing by Susan Fenton)