Russia’s Diesel Exports Heading for Record Despite EU Sanctions

Russia’s diesel exports are on course to hit a record this month despite European Union sanctions depriving the country of its biggest market.

Moscow is so far shrugging off concern that the bloc’s recent import ban would force it to reduce exports amid a lack of alternative buyers. Instead, Turkey, Morocco and other nations have stepped up purchases — though some cargoes from Russia are also being held in floating storage.

Shipments of diesel-type fuel out of Russia during the first 19 days of March stood at about 1.5 million barrels a day, according to Vortexa Ltd. data compiled by Bloomberg on Friday. If that rate is maintained, this month will see the highest exports in data going back to the start of 2016.

“Russia’s refinery runs remained high so far in March, which allowed robust diesel output,” said Mikhail Turukalov, an independent US-based oil-products analyst. “Domestic producers seem quite confident they can sell their volumes to foreign buyers — the discounts they offer are deep enough and there are new markets for the fuel.”

Yet the boom in shipments may not last. Loading plans for key Russian ports show a drop in April versus March schedules.

See also: Russia Seaborne Diesel Exports Set to Slip in April Amid Repairs

A large chunk of Russia’s diesel-type fuel exports are being shipped to Turkey. Other importers include Morocco, Brazil, Tunisia and even top oil exporter Saudi Arabia.

But there’s also been a significant increase in the amount of diesel-type fuel from Russia held in floating storage since the EU’s import ban began — perhaps a sign that finding replacement customers is proving challenging.

See also: Russia’s Diesel Exports From Primorsk on Course for a New High