The Middle East is emerging as a significant supplier of industrial fuel to both Europe and Asia, according to a recent report. The region is boosting its stocks in Asia by purchasing Russian oil, which is being laundered onto the European market. This move is aimed at avoiding US sanctions and is impacting Asian diesel exports out of these markets. The report notes that Saudi Arabia has been purchasing Russian oil at record levels, while margins and prices of refiners in the east are hovering at their lowest in over a year.
Ship tracking data from Refinitiv, Kpler, and Vortexa indicated that there were almost no Russian arrivals a year earlier. However, in March 2023, at least 500,000 tonnes of fuel were discharged at Fujairah and Saudi Arabia alone. The Middle East took up just over 10% of Russia's exports loading in February and March, according to the report.
The move by Saudi Arabia comes after the European Union banned the import of Russian oil products in December and February. This forced the shipments to arrive elsewhere. Saudi Arabia is positioning itself as a prominent supplier of industrial fuel to both Europe and Asia, adding to the output of refineries in Saudi Arabia and Kuwait.
The global demand for industrial fuel is increasing due to the growth of the industrial sector. The Middle East has abundant oil and gas reserves, making it an attractive region for fuel supply. Additionally, the region's strategic location makes it ideal for supplying fuel to both Europe and Asia. The region's fuel exports are expected to continue growing, with Saudi Arabia leading the way.
The report also notes that the demand for clean energy is increasing, and governments worldwide are investing in renewable energy sources. This investment is expected to decrease the demand for fossil fuels in the long term. However, in the short term, the demand for industrial fuel will continue to grow, and the Middle East is poised to meet that demand.
In conclusion, the Middle East is emerging as a significant supplier of industrial fuel to both Europe and Asia. The region's strategic location and abundant oil and gas reserves make it an ideal fuel supplier. Saudi Arabia, in particular, is positioning itself as a prominent supplier of industrial fuel to both Europe and Asia, adding to the output of refineries in Saudi Arabia and Kuwait. While the demand for clean energy is increasing, the demand for industrial fuel will continue to grow in the short term.
