Russian oil producers send CPC Blend to UAE, open new export route

MOSCOW (MRC) -- Russian oil producers supplied their first cargoes of CPC Blend crude to the United Arab Emirates (UAE) in August and September, traders told Reuters, opening up a new export route as Moscow looks to find new customers and skirt Western sanctions.

Moscow has found new markets for its oil despite sanctions imposed by G7 countries since the start of the war in Ukraine, which Moscow calls a special military operation. The world's third largest oil exporter, Russia has rerouted most of its oil to China, India and Turkey over the past year, and has also sent cargoes to countries including Brazil, Sri Lanka and Pakistan.

In August and September two Russian firms - oil major Lukoil and independent producer CenGeo - sold their oil to the UAE. Both supplied CPC Blend, a grade that is being mostly produced in Kazakhstan and supplied to global markets through Russia's Black Sea port of Yuzhnaya Ozereyevka.

However, some crude from Russia is also being added to the CPC pipeline in Russia. The tanker Pola loaded a cargo supplied by CenGeo and marketed by Dubai-based Paramount Energy Trading from Yuzhnaya Ozereyevka on Aug. 14-15, the traders said. This was offloaded at ADNOC's Ruwais refinery terminal on Sept. 14, LSEG data shows.

Early in August, Lukoil's trading arm Litasco supplied 123,000 tons of CPC Blend oil on Delta Hellas tanker also to Ruwais terminal, LSEG data shows. ADNOC declined to comment on the purchase. CenGeo, Paramount Energy and Lukoil did not reply to Reuters requests for comment.

UAE, which is itself a large producer and supplies Murban oil to international markets, sometimes imports different grades for its refineries to optimize price differences, traders said. The UAE has not imposed sanctions against Russia and is not part of the Western moves over the Ukraine war.

CPC Blend oil delivered to UAE's ports in September would be cheaper than the UAE's Murban oil, traders said. The U.S. Office of Foreign Assets Control (OFAC) said earlier that CPC Blend oil was not subject to sanction limitations if it was of Kazakh origin and suggested that buyers of the blend seek certificates of origin.

The U.S. warning on CPC Blend only applies to buyers which are observing sanctions. The two traders, who declined to be named, said that the CPC crude from Russia was sold at discount to Kazakh cargoes.

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MOSCOW (MRC) -- Industrial companies in the Netherlands get USD42-49 B in tax breaks and subsidies annually for using fossil fuels, the Dutch government said in a report aimed at spurring international debate on such subsidies, said Hydrocarbonprocessing.

The 'fossil subsidies' range from tax exemptions on fuels used in aviation and as input in industrial processes, to relatively low energy tax rates for industries that use large quantities of gas.

"We have mapped out how many billions of fossil subsidies are in our system. Now I'd like to know how that is in other countries. And whether we find that acceptable," outgoing climate minister Rob Jetten said in an interview with Dutch newspaper Trouw.

The overview comes amid ongoing protests by climate activists, who on Tuesday blocked a section of a major traffic artery in The Hague for the 11th straight day, demanding an immediate end to all fossil subsidies.

We remind, Russia's Sakhalin Energy, which produces liquefied natural gas and oil, has fully resumed production following maintenance. The company has said it planned maintenance in July without providing a timeframe. Sakhalin Energy's Sakhalin-2 operating company was transformed into a Russian entity via a presidential decree amid Western sanctions against Moscow over its actions in Ukraine.

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MOSCOW (MRC) -- Britain will push back a ban on new petrol and diesel cars and vans to 2035 from 2030, Prime Minister Rishi Sunak said on Wednesday, adding that the cars would still be available to buy on the secondhand market thereafter, said Reuters.

Back in 2020, then Prime Minister Boris Johnson announced that the sale of new petrol and diesel engined cars would be banned from 2030, with hybrid-engine models allowed to be sold until 2035; thereafter, all new cars in the UK would be EVs. However, the current Prime Minister has abandoned this plan to appease voters and some Tory backbenchers (although many within the Conservative party urged Sunak to stick to the original deadline).

Citing the need to maintain consumer flexibility at the turn of the decade, the Prime Minister's revised policy brings the UK into line with most of Europe, including France, Italy and Spain.

The UK Government recently announced ?500m of subsidies to Jaguar Land Rover to build its ?4bn gigafactory in Somerset. It has also committed ?211 million in advance battery research via the Faraday battery challenge.

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MOSCOW (MRC) -- China's fuel oil imports retreated for a second consecutive month in August, data from the General Administration of Customs showed on Wednesday, as per Reuters.

Total fuel oil imports were down 8% from July to 1.4 million metric tons in August, though still more than double compared to the same period last year. The imports included purchases under ordinary trade, which is subject to import duty and consumption tax, as well as imports into bonded storages.

The decline came amid recovery in China's diluted bitumen imports, after customs authorities eased months-long inspections. A sharp uptick in Asia's high sulfur fuel oil prices in August also deterred purchases.

China's fuel oil imports started to show signs of easing in July after hitting a decade-high in June, the data showed. Independent refiners earlier boosted fuel oil purchases to be used as a refinery feedstock this year, particularly discounted barrels of Russian high sulfur fuel oil.

Meanwhile, China's exports of low sulfur marine fuels, measured mostly by sales from bonded storage for vessels plying international routes, totaled 1.55 million tons in August, up 1% from July but down 20% from a year ago.

The table below shows China's fuel oil imports and exports in metric tons. The exports section largely captures China's low sulfur oil bunkering sales along its coast.

We remind, Russia's Sakhalin Energy, which produces liquefied natural gas and oil, has fully resumed production following maintenance. The company has said it planned maintenance in July without providing a timeframe. Sakhalin Energy's Sakhalin-2 operating company was transformed into a Russian entity via a presidential decree amid Western sanctions against Moscow over its actions in Ukraine.

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MOSCOW (MRC) -- North American chemical rail traffic rose for a fifth consecutive week, with railcar loadings for the week ended 16 September up 2.0% year on year to 46,964, according to the Association of American Railroads.

Increases in the US and Mexico more than offset a decline in Canada. For the first 37 weeks of 2023 ended 16 September, North American chemical rail traffic was down 1.7% year on year to 1,676,950 loadings - with the US down 3.0% to 1,152,729.

In the US, chemical railcar loadings represent about 20% of chemical transportation by tonnage, with trucks, barges and pipelines carrying the rest. In Canada, chemical producers rely on rail to ship more than 70% of their products, with some exclusively using rail.

We remind, North American chemical rail traffic rose for a fourth consecutive week as railcar loadings for the week ended 9 September were up 2.8% year on year to 43,757, with the US, Canada and Mexico all registering increases.

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