The demand for oil storage tanks in Singapore is rising, a sign that a flood of fuel from Russia is being mixed and re-exported globally. Tank space in the country is being snapped up because of an increase in interest and profits from mixing supplies of cheap fuel from Russia with shipments from other sources, a tank operator official and a consultant on the matter said as per report by news agency Bloomberg.
Singapore has not banned the import of Russian oil or petroleum products, unlike the United States and European Union (EU) countries which have done so as retaliation for Moscow’s offensive in Ukraine. However, financial institutions in Singapore are prohibited from financing or dealing with Russian goods and companies, the Bloomberg report said.
Since the beginning of the war in Ukraine in February last year, Russian crude oil and fuel flows to Asia and the Middle East increased after western buyers turned away in retaliation. These (Russian) shipments have increasingly made their way to blending and redistribution hubs like Singapore and Fujairah in the United Arab Emirates where they can be co-mingled, repackaged and re-exported globally, the report added.
These Russia to Asia shipments would increase in the coming weeks as the EU would impose new sanctions on Russian petroleum products from February 5.
A spokesperson for Advario Asia Pacific Pte, an oil storage firm, told the news agency that the firm has observed an increase in the number of inquiries of short/spot-term storage in the period leading up to December. The spokesperson added that the firm verified the source of products to ensure compliance with Russian sanctions before accepting them.
A spokesperson from the Jurong Port Universal Terminal Pte did not talk about the movement of specific products but said the firm complies with all applicable sanctions.
William Tan from Singapore-based Miyabi Industries, a marine fuel consultancy firm, told Bloomberg that traders and fuel suppliers are all over oil storage and blending plays right now because of “very good” profit margins from such activities. Tan said that traders can enjoy close to 20% profit margin from mixing Russian components with other grades to make a blended fuel oil product, adding this trend has been going on since October last year.
(With inputs from agencies)
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