Alternatives to Russia oil: India’s Reliance, Nayara ramp up supplies to Brazil, Turkey, UAE; plug in shortages as Russian refineries hit

With Russia’s oil refineries being damaged by Ukraine attacks, India’s oil companies are plugging in the resulting shortages in the global oil markets. India has moved to fill fuel supply gaps in Russia's primary markets following Ukrainian drone attacks that damaged Moscow's refining capabilities, leading to reduced fuel exports.

Major private sector refiners Reliance Industries and Nayara Energy have increased their fuel deliveries to Brazil, Turkey, the UAE and various African nations, as these destinations look for alternatives to Russian fuel supplies, according to an ET report.

Russian refineries hit

Ukraine has intensified its drone strikes on Russian refineries and pipeline networks, affecting processing capabilities and reducing petrol and diesel production. As winter approaches and fuel demand rises seasonally, these attacks have resulted in fuel shortages at petrol stations and price increases in certain Russian regions, according to news reports.

Ukraine's strategy of striking Russia's energy facilities aims to reduce Moscow's capacity to earn revenue from oil and gas sales, which have continued despite various western restrictions. Although the drone attacks have decreased Russia's refined product exports, they have resulted in additional crude oil becoming available for international sales.

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Russia has given preference to its domestic fuel requirements, implementing export restrictions to manage local shortages. This resulted in a reduction of product exports by approximately 200,000 bpd in September, as reported by Kpler, an organisation specialising in global real-time data and analytics.

"Russian refinery outages and new export restrictions-partial diesel ban; gasoline ban extensions-constrained product outflows in late September from Russia," said Sumit Ritolia, lead research analyst, refining and modeling at Kpler according to the report.

Advantage Indian refineries

Indian refined product shipments to Brazil saw a significant increase, reaching 97,000 barrels per day (bpd) in September, compared to 40,000 bpd in August, and notably higher than the 40,000 bpd exported in the previous year.

Turkish exports increased to 56,000 bpd from 20,000 bpd in August, whilst no deliveries were recorded in September of the previous year. "That's exactly the kind of backfill you'd expect when Russian diesel/gasoline pulls back," Ritolia said.

The majority of Indian exports to Brazil and Turkey originated from Reliance, with Nayara providing a smaller portion. Both nations, traditionally significant importers of Russian diesel, had previously been minor customers for Reliance.

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Nayara, which had not exported to either country in the last two years, initiated shipments in August and September after EU sanctions restricted access to its usual markets.

India enhanced its oil deliveries to the UAE, which also buys substantial Russian oil, reaching 201,000 bpd in September compared to 140,000 bpd in August. Whilst exports to Egypt and Togo increased, deliveries to the US, Australia, Singapore and Malaysia reduced. India's total refined products exports increased by 14% to 1.59 million bpd in September compared to the previous month.