Russia' new oil export route to the UAE

By Rhod Mackenzie

Russian oil producers delivered their initial shipments of the CPC Blend crude to the United Arab Emirates (UAE) during August and September, according to several traders. This development exposes a new export pathway, as Moscow seeks out fresh clients and attempts to bypass Western sanctions.

Moscow has discovered a means of identifying new markets for its oil, despite the sanctions that G7 nations imposed since the commencement of the Ukraine conflict, which Moscow describes as a special military operation.

Russia, the world's third-largest oil exporter, has redirected a significant proportion of its oil to China, India, and Turkey in the past year. Additionally, it has exported oil to Brazil, Sri Lanka, and Pakistan.

According to the traders, in August and September of this year, two Russian companies, oil giant Lukoil and independent producer CenGeo, sold oil to the UAE.

The CPC Blend, which is chiefly produced in Kazakhstan and delivered to worldwide markets via Russia's Black Sea port of Yuzhnaya Ozereyevka, was provided by both parties.

Nevertheless, as stated on the CPC website, some Russian crude oil is also included in the CPC pipeline in Russia.

Traders proclaimed that on August 14-15, the tanker Pola loaded a batch provided by CenGeo and advertised by a ship agent-identified trader named Paramount from Yuzhnaya Ozereyevka. On September 14, LSEG's oil shipment data shows that this was offloaded at ADNOC's Ruwais refinery terminal.

In August, Lukoil's trading arm, Litasco, supplied 123,000 tonnes of CPC Blend oil to the Ruwais terminal via the Delta Hellas tanker, as noted by LSEG data.

ADNOC has refrained from commenting on the purchase, while requests for comment from CenGeo, Paramount Energy, and Lukoil have gone unanswered.

According to traders, the UAE, which is a significant producer of Murban oil and trades it to global markets, occasionally imports different grades to optimise price disparities for its refineries.

The United Arab Emirates has refrained from imposing sanctions against Russia and is not involved in the Western actions amidst the Ukraine war.

According to traders, the CPC Blend oil delivered to UAE's ports in September would be less costly than the domestically-produced Murban oil.

The Office of Foreign Assets Control (OFAC) in the US asserted that there are no sanctions on CPC Blend oil of Kazakh origin and suggested that purchasers obtain proof of origin.

The warning issued by the US regarding CPC Blend solely pertains to buyers adhering to sanctions.

The two traders, who chose to remain anonymous, revealed that CPC crude from Russia was sold at a discounted rate compared to Kazakh cargoes.