Russian oil producer Rosneft saw a 32% drop in its bunker sales last year, in another indication of the scale of the Russian market’s collapse in the wake of IMO 2020 and the COVID-19 crisis.
The company sold 1.9 million mt of bunker fuel last year, down from 2.8 million mt in 2019.
Similarly, rival Russian oil firm Gazprom Neft saw a 41% drop in its bunker sales last year, from 2.99 million mt in 2019 to 1.77 million mt in 2020.
The two firms between them command close to 50% of the Russian market.
The decline shows the scale of the problem that hit Russian bunker suppliers last year. While HSFO was the dominant bunker fuel, Russia’s abundant supplies of the product made its prices competitive with the bunker hubs.
But IMO 2020 saw VLSFO take over as the shipping industry’s preferred bunker fuel, and Russia’s more limited supplies of middle distillates as well as higher taxes made it harder to compete. Ship & Bunker pricing shows St Petersburg’s VLSFO has ranged from a $25/mt discount to a $3/mt premium to Rotterdam’s levels so far this year, compared to an HSFO discount ranging from $14-38/mt in the same period of 2019.
The COVID-19 pandemic came as a second impact to the Russian market, taking away the cruise industry traffic that is a significant part of sales at ports in the Baltic.
Russian market sources have told Ship & Bunker demand was down by as much as 75% at some ports for parts of last year.
Ship & Bunker