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Russia's refined oil product exports to Singapore to hit highest this year in May

NEW DELHI (Reuters)—Russia's exports of naphtha to Singapore are on track to rise to their highest level this year in May as Russian refineries recover from drone attacks, traders and analysts estimated, with the trend poised to continue as more capacity comes online.

Singapore imports of Russian naphtha, a key ingredient for making petrochemicals such as plastics and textile fibers, will rise to about 415,000 metric t in May, LSEG Research estimated, while consultancy FGE expects nearly 500,000 t.

"The refinery (attack) impact wanes off through May and June, which is why we may expect higher exports from Russia," said Armaan Ashraf, global head of natural gas liquids at FGE. He was referring to drone attacks by Ukraine on oil processing facilities in Russia since the start of the Ukraine war.

Naphtha imports from Russia into Singapore rose in April to their highest this year at 329,955 t. That pushed Singapore's total naphtha imports for April to 998,408 t, up from 920,626 t a year earlier, data from Enterprise Singapore showed.

"The higher imports reflect blending demand for naphtha ahead of peak gasoline demand season in summer," a Singapore-based petrochemical trader said.

Naphtha can be blended directly into gasoline or refined to make blending components to meet octane specifications.

Rosneft's export-oriented Tuapse oil refinery, one of the largest in Russia's south, resumed processing earlier this month, with loadings expected to rise by about 16% to 180,000 t in May as it restarts exports, according to trade estimates.

Novatek, meanwhile, plans to start test operations for a new 3-metric MMtpy processing unit at its gas condensate complex in the Baltic Sea port of Ust-Luga in mid-June, which could enable it to increase naphtha exports to between 550,000 and 600,000 t a month from 350,000 to 370,000 t currently, Reuters calculations show.

Novatek produces naphtha mostly for Asia, including China, Singapore, Taiwan and Malaysia.

In the first week of May, Russian naphtha was around $8 per ton cheaper than naphtha from the Middle East, the top supplier to Asia. The gap had narrowed to about $5 in February after Red Sea war risk premiums drove up freight costs.


For all of Asia, naphtha loadings from Russia are on track to reach about 700,000 t, according to trade estimates as of May 8, compared to 950,000 t in April. LSEG's Krystal Chung expects May imports into Asia from Russia to hit a year-high of 850,000 t. FGE's Ashraf said total Russian naphtha exports into Asia will reach 1.4 MMt–1.5 MMt levels in June, but the risk of more Russian refining capacity being subdued remains.

Ukraine's drone attacks have disrupted 15% of Russia's oil refining capacity this year, according to an estimate by a NATO official at the beginning of April.

Asia is structurally short of naphtha and relies on Northwest Europe, the Mediterranean and the U.S. to meet the shortfall of about 2 MMt per month. However, Russia flooded Asian markets with its naphtha last year after Western sanctions on its oil product exports upended trade flows, keeping margins subdued due to high supplies amid sluggish demand. Russia accounted for 25% total naphtha imports into Asia in 2023, ship-tracking data from Kpler showed.

(Reporting by Mohi Narayan, additional reporting by Natalia Chumakova; Editing by Susan Fenton)


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