Ukraine war: Russian oil is getting mixed in Singapore and re-exported, sources say
- Singapore has not banned the import of Russian oil, but financial institutions based there are prohibited from financing or dealing with Russian companies
- Data showed that Singapore oil-receiving terminals took in more than double the volume of Russian oil in December 2022 as compared to a year ago
Demand is soaring for oil storage tanks in Singapore, in a sign that a flood of Russian fuel is being blended and re-exported globally.
Tank space in the city state is being snapped up due to a rise in interest and profits from mixing cheap fuel supplies from Russia with shipments from other sources, according to an executive from a tank operator and a consultant who advises traders on the matter. That process can help to obscure the cargoes’ origins, they said.
Singapore has not banned the import of Russian oil or petroleum products, although financial institutions based in the city state are prohibited from financing or dealing with Russian goods and companies. Singapore government agencies referred to past statements on the ban and price cap policy, without additional comments.
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Still, the handling and trading of Russian fuel remains a sensitive issue in the region, with some buyers not wanting to be seen purchasing the cargoes.
Russian crude oil and fuel flows to Asia and the Middle East have surged since Moscow’s war in Ukraine prompted Western buyers to turn away in retaliation. Such shipments have increasingly made their way to blending and redistribution hubs like Singapore and Fujairah in the United Arab Emirates where they can be co-mingled, repackaged and re-exported globally.
This trend of more Russia-to-Asia shipments and the growing role of hubs in their redistribution may further intensify in the coming weeks as Europe prepares to roll out new sanctions on Russian petroleum products on February 5. Oil market participants are keenly watching to see where Russian fuels such as gas oil, naphtha and fuel oil will find homes as many Asian nations are not taking a hard stance on sanctions.
More inquiries
“We have observed an increase in the number of inquiries of short/spot term storage in the period leading up to December,” a spokesperson for oil storage firm Advario Asia Pacific Pte Ltd said via email. The company verifies the source of products to ensure compliance with Russian sanctions before accepting them, the person added.