Russia tops up ESPO Blend crude exports from Kozmino in Q4 on firm China demand
Russia plans to increase its ESPO Blend oil ESPO-DUB exports from the Far East Kozmino port in the fourth quarter this year to meet rising demand from China, three industry sources said on Thursday.
Russian companies will load about 3 million tonnes of ESPO Blend crude oil in December, according to preliminary export requests, the sources said, while the remaining export quota allows to load just 2.5 million tonnes in the last month of the year.
ESPO Blend loading plan from Kozmino port in December is expected to be released on Oct. 25, though many of the cargoes are already placed as companies try to finish marketing in advance to match the trading cycle in Asia.
According to the sources, the initial quarterly export quota for October-December this year was topped up by 0.5 million tonnes to 9.2 million tonnes following exporters’ requests. It is about 6% rise to the initial quota, according to Reuters calculations.
Russian oil companies compete for high export volumes from Kozmino port due to its high profitability compared to Western routes, the sources said, especially when premiums for the grade rise.
During December trading cycle premiums for ESPO Blend have risen to two-years highs on good demand from China.
Two of the sources suggested the December loading plan may rise above 3 million tonnes as exporters try to secure more export volumes.
Nevertheless ESPO Blend loadings from Kozmino port may not be increased much more due to limited port capacity, which is thought to be 3.2 million tonnes per month, the sources said.
Source: Reuters (Reporting by Olga Yagova, Gleb Gorodyankin; editing by David Evans)