Russian oil getting mixed in Singapore, then re-exported, sources say

Demand is soaring for oil storage tanks in Singapore, in a sign that a flood of Russian fuel is being blended and re-exported globally.

Tank space in the city-state is being snapped up due to a rise in interest and profits from mixing cheap fuel supplies from Russia with shipments from other sources, according to an executive from a tank operator and a consultant who advises traders on the matter, Bloomberg reports.

That process can help to obscure the cargoes’ origins, they said.

Singapore hasn’t banned the import of Russian oil or petroleum products, although financial institutions based in the island state are prohibited from financing or dealing with Russian goods and companies. Singapore government agencies referred to past statements on the ban and price cap policy, without additional comments.

Still, the handling and trading of Russian fuel remain a sensitive issue in the region, with some buyers not wanting to be seen purchasing the cargoes.

Russian crude oil and fuel flows to Asia and the Middle East have surged since Moscow’s war in Ukraine prompted western buyers to turn away in retaliation. Such 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.

This trend of more Russia-to-Asia shipments and the growing role of hubs in their re-distribution may further intensify in the coming weeks as Europe prepares to roll out new sanctions on Russian petroleum products on February 5. Oil market participants are keenly watching to see where Russian fuels such as gasoil, naphtha and fuel oil will find homes as many Asian nations aren’t taking a hard stance on sanctions.