FUJAIRAH DATA: Oil product stocks turn higher on year after small weekly drop

Oil product inventories at the UAE's Port of Fujairah dropped from a one-year high in the week ended July 11 but were higher than a year earlier for the first time since March, according to Fujairah Oil Industry Zone data shared exclusively with S&P Global Commodity Insights on July 13.

Total stockpiles stood at 22.043 million barrels as of July 11, down 0.9% from a week earlier, when they hit the highest since June 28, 2021, according to data provided to S&P Global since January 2017.

Jet fuel and other middle distillate inventories dropped 3.5% to 3.675 million barrels, a two-week low, while heavy distillates used as fuel oils for power generation and shipping declined 3.8% to 12.144 million barrels, also the lowest in two weeks.

Gasoline and other light distillates stocks stood at 6.224 million barrels as of July 11, up 6.9% from a week earlier and the highest in four weeks.

Total inventories were still 4.09% higher than this time last year, marking the first time since March that inventories were higher than a year earlier. Residues led the way, up 9.89% since July 2021 while middle distillates were 0.5% higher and light distillates were 3.78% lower.

Fuel oil imports to Fujairah from Russia climbed to 1.243 million barrels for the week started July 4, the highest since November 2021, according to Kpler data. Russian refineries are major producers and exporters of fuel oil and feedstocks, including high sulfur fuel oil, and the US used to be a major importer until Russia invaded Ukraine in February.

"Russia is finding new markets to take its fuel oil after the US and EU bans," Dong Wang, analyst, Middle East oil markets at S&P Global Commodity Insights, said. "We expect European buyers will be increasingly shunning Russian crude and products as we head into the end of the year, leaving places like Fujairah ripe to take the extra supplies from Russia."

Most Western energy companies have stopped dealing with Russian oil since Russia invaded Ukraine on Feb. 24. Sanctions on Russian oil by the US, the UK and the EU have also curbed the flow of Russian oil in these regions while China and India have continued to buy.