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Europe set for flood of fuels from Russian refineries

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Hydrocarbon Engineering,

Russian refiners will increase production of transport fuels by 110 000 bpd next year, according to ESAI Energy’s recently published ‘CIS Watch One-Year Outlook.’

This will mark the first significant increase in Russian supplies of transport fuels in several years, and will allow the country’s refiners to expand their share of Europe’s middle distillate market.

Larger volumes of Russian middle distillate in Europe will come at the expense of refiners in the US and the Middle East, who also count on exports to Europe.

This year, Russian refiners produced 2.7 million bpd of gasoline, diesel, and jet fuel. In 2018, the launch of Taneco's 140 000 bpd crude distillation unit and TAIF's 70 000 bpd hydrocracker will result in a 110 000 bpd increase in refinery output of transport fuels. The projects will result in higher gasoline, diesel, and jet fuel production, but little to no additional fuel oil.

Andrew Reed, ESAI Energy, said: “For the past couple of years, deteriorating refining margins resulted in a bumpy ride for refiners, which restrained product output […] That will all change in 2018. More than half of the 110 000 bpd of new supply will be exported. The main consequence is that Russia will carve out a bigger share of Europe’s middle distillate market. That’s bad news for diesel-exporting refineries in the US and Middle East who count on deliveries to Europe.”

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