Turkey has boosted imports of Russian gas oil this month, slashing flows of the product beyond the Turkish Bosporus Strait to the rest of the Mediterranean and driving up price value to four-year highs.
Traders said the increased shipments partly reflect the increased capacity of Turkish refiner Tupras to reduce sulfur content in the product, enabling it to make higher-value diesel fuel for domestic consumption and export.
“They’re taking far more than last year,” one trader said. “Desulfurization (capacity) has increased.” “Demand has been very good there,” another said.
The country was the destination for almost a quarter of million tons of Russian gas oil loaded out of the key Black Sea terminal of Novorossiysk so far this month, or 85 percent of total shipments from the port, shipping agent data showed.
That compared with less than half of Novorossiysk’s total gas oil exports of over 500,000 tons in March, and just over a third of total exports from the port in February.
While shipments head for Turkey, Russian gas oil exports from other major Black Sea terminal of Tuapse have slid this year as the port focuses on boosting fuel oil shipments.
This has cut gas oil flows to the rest of the Mediterranean, triggering a surge in Med gas oil price values to their highest levels since the United States invaded Iraq in 2003.
Mediterranean-delivered gas oil cargo price premiums were bid up to $36 a ton over front month ICE gas oil this week, touching the highest levels since March 28, 2003.
Price premiums have averaged around $23 a ton so far this year, compared with $17 a ton in 2006.
(Reuters, 18/04/2007)