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Some Urals flows to Asia diverted via Africa, India remains top destination

At least three tankers with Russian Urals oil on board chose a longer route to Asia around the Africa’s Cape of Good Hope in March and April as military risks in the Red Sea remain high, two traders said and LSEG data showed.

Two tankers, Fos Picasso and Hydra, carrying some 200,000 metric tons of Urals oil loaded from Baltic in April went to India around Africa, while the vast majority of the vessels with Russian oil have been choosing the shorter route via Suez channel and Red Sea, LSEG data shows.

Most ships carrying Russian goods travel via the Red Sea as they sweep away risks of Houthi attacks and are less worried than Western shipping companies. Some ships are specifically signalling “Russian crew onboard” so that the ship is not hit by mistake.

“Higher cost of the voyage around Africa is largely offset by lower insurance costs, but it takes two extra weeks to deliver crude from Baltic ports to India via the route around Africa’s Cape of Good Hope”, a source with a direct knowledge of the matter said.

Asia, specifically India and China, are the main markets for Russian oil after an EU embargo in 2022, and lower shipping costs are crucial for the oil companies.

In April, India remained the largest destination for Russian Urals crude. At least 60% of cargoes of the grade loading from the state’s western ports in April are going there, while the final destination of some cargoes heading to Asia has yet to emerge, LSEG and traders data show.

Turkey was the second largest destination point with about 15% of oil supplies. Large amount of oil from Russian ports are supplied to Turkey’s STAR refinery operated by Azerbaijan’s SOCAR.

China was the third largest destination for Russian Urals oil in April. China remains the largest buyer of Russian Far East oil grades like ESPO Blend and Sokol.

Total oil loadings from Russia’s western ports in April, including Urals, KEBCO and Siberian Light crude, stood around 9.5 million tonnes, including some 8.7 million tonnes of Urals.

Last month Russia loaded some 6.8 million tonnes of Urals from its Baltic ports of Primorsk and Ust-Luga, trader’s data and Reuters calculations showed.
Source: Reuters (Reporting by Reuters; Editing by Josie Kao)

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