Russian Oil Producers Open New Export Route to UAE

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Russian oil producers supplied their first cargoes of CPC Blend crude to the United Arab Emirates (UAE) in August and September, four traders told Reuters, opening up a new export route as Moscow looks to find new customers and skirt Western sanctions.

Moscow has found new markets for its oil despite sanctions imposed by G7 countries since the start of the war in Ukraine, which Moscow calls a special military operation.

The world’s third largest oil exporter, Russia has rerouted most of its oil to China, India and Turkey over the past year, and has also sent cargoes to countries including Brazil, Sri Lanka and Pakistan.

In August and September two Russian firms – oil major Lukoil and independent producer CenGeo – sold their oil to the UAE, the four traders said.

Both supplied CPC Blend, a grade that is being mostly produced in Kazakhstan and supplied to global markets through Russia’s Black Sea port of Yuzhnaya Ozereyevka.

However, some crude from Russia is also being added to the CPC pipeline in Russia, according to the CPC website.

The tanker Pola loaded a cargo supplied by CenGeo and marketed by a trader named in ship agent data as Paramount from Yuzhnaya Ozereyevka on Aug. 14-15, the traders said. This was offloaded at ADNOC’s Ruwais refinery terminal on Sept. 14, data from LSEG, which tracks oil shipments, shows.

Geneva-based Paramount Energy and Commodities SA did not respond to an emailed Reuters request for comment pre-publication. The news agency was unable to establish the full name of Paramount and its country of registration from sources and data.

Post-publication, a lawyer representing Paramount Energy and Commodities DMCC, which is based in Dubai, said it did not market the cargo. Reuters has no evidence that it did.

Early in August, Lukoil’s trading arm Litasco supplied 123,000 tonnes of CPC Blend oil on Delta Hellas tanker also to Ruwais terminal, LSEG data shows.

ADNOC declined to comment on the purchase. CenGeo, Paramount Energy and Lukoil did not reply to Reuters requests for comment.

UAE, which is itself a large producer and supplies Murban oil to international markets, sometimes imports different grades for its refineries to optimize price differences, traders said.

The UAE has not imposed sanctions against Russia and is not part of the Western moves over the Ukraine war.

CPC Blend oil delivered to UAE’s ports in September would be cheaper than the UAE’s Murban oil, traders said.

The U.S. Office of Foreign Assets Control (OFAC) said earlier that CPC Blend oil was not subject to sanction limitations if it was of Kazakh origin and suggested that buyers of the blend seek certificates of origin.

The U.S. warning on CPC Blend only applies to buyers which are observing sanctions.

The two traders, who declined to be named, said that the CPC crude from Russia was sold at discount to Kazakh cargoes.

Source: Reuters

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