India and Saudi Arabia have recently become the main importers of Russian fuel and diesel oil. Total exports of Russian fuel and diesel oil amounted to 4.15 million tons, while shipments to India increased by 56%. These two countries have been the main destinations for Russian seaborne exports of fuel and vacuum gas oil (VGO).
Moreover, Asia has become the main market for Russian fuel and VGO since the imposition of the full embargo by the European Union on Russian oil products in February 2023. Russian exports of fuel and diesel oil to India rose 56% to 0.51 million tonnes. It is important to note that Indian refineries use fuel and diesel oil as a cheaper alternative to Urals oil.
However, the PRC contemplates on a tax reform aimed at increasing the cost of importing fuel oil, leading to the reduction of demand. This measure will exert additional pressure on independent refineries of the PRC, using fuel oil as a cheap alternative for refining.
