Moscow bans gasoline exports from Sept. 1. Market sources see pull on USGC diesel

Jordan Daniel, Platts S&P Global

HOUSTON
EnergiesNet.com 08 16 2024

Flows of Russia-produced gasoline to Brazil are likely to slow in the coming weeks in month after a shift in policy from Moscow, while market sources say diesel inventories in the South American country are finally beginning to draw down.

Russia’s energy ministry said on Aug. 14 that it would ban the export of gasoline from Sept. 1 until the end of the December.

The ministry cited the need to secure domestic supply amid strong season demand and as refineries undergo maintenance.

Russian officials on March 1 introduced a six-month ban on gasoline exports, which was temporarily lifted in late May.

Data from S&P Global Commodities at Sea showed that from the beginning of March through Aug. 31, about 6.5 million barrels of Russian-origin naphtha in 23 cargoes have made or will make the trek to Brazil. Over the same period, a smaller 1.23 million barrels of gasoline have been tracked on the same route.

Brazilian refined product market sources previously had indicated that weak prices for gasoline in Brazil in recent months had been a result of an influx of naphtha and gasoline from Russian refiners.

Platts assessed the differential for delivered gasoline in South Brazil at NYMEX October RBOB futures minus 18 cents/gal on Aug. 14.

Brazil diesel stocks draw lower

One market source said that diesel exports from Russia have been slowing recently, potentially leading more players to lean on USGC-origin ULSD and other products.

“Brazil is facing some difficulties finding Russian barrels, so we may see some demand on the [USGC],” the same source said.

However, CAS data showed exports of gasoil/diesel from Russia to Brazil remain strong. For the first eight months of 2024, more than 44 million barrels of Russian-origin ULSD were scheduled to arrive in Brazil, including about 5.67 million barrels schedule to discharge in August, in line with volumes seen each month of 2024.

“Everybody was fully stocked for a while, so now we’re seeing some stock draws finally,” one market source said. “The market is getting more tight after several months of excess product”

The CAS data showed Aug. 15 that about 2.45 million barrels of gasoil and diesel are slated to be delivered in Brazil from the USGC in August, roughly flat to the 2.54 million barrels delivered in July.

Platts, part of S&P Global Commodity Insights, assessed the differential for delivered ULSD in South Brazil at NYMEX October ULSD futures minus 3 cents/gal on Aug. 14.

spglobal.com 08 15 2024