Product tanker markets may soon see the true effect of the European Union’s ban on Russian oil.

This is because the final tanker shipment of Russian diesel could already have taken place ahead of the 5 February cut-off date.

European oil traders said delivery and payment have to be completed before then, according to S&P Global Commodity Insights.

That only leaves a little over two weeks for tankers to load, transport and discharge, and for money to change hands.

This is before the added complications of payment involving Russian entities as a result of earlier financial sanctions is even taken into consideration.

“As a result, we may soon see the true impact of the ban,” said Clarksons Securities analysts led by Frode Morkedal.

Europe has continued to source more than a quarter of its diesel imports from Russia, according to tanker-tracking data.

Russian exports both delivered and en route to the EU, Norway and the UK averaged 448,000 barrels per day (bpd) in the first 18 days of January, down from 663,000 bpd in December.

Pre-war levels were 670,000 bpd in early 2022, according to data from S&P Global Commodities at Sea.

As a result, Russian diesel made up 27% of Europe’s total 1.69m bpd of imports in the period.


The fall has come despite Russian diesel being up to $130 per tonne below non-Russian-origin diesel delivered into the Amsterdam, Rotterdam, Antwerp refining hub, according to traders.

Meanwhile, rates for product tankers have continued to decline, with LR2 eco earnings falling to $38,100 per day, down 28.7% from last week, according to Clarksons Securities.

MR eco levels have dropped to $27,600 per day, down 8.2% in seven days.

“The winter storm that hit the US last month is still affecting cargo volumes in the US Gulf, putting pressure on ex-USG rates,” Morkedal and his team said.

According to Energy Information Agency data, refinery utilisation in the US increased 1.2% week-on-week to 85.3%, but remains below the 90% seen prior to the storm.

Since Russia's invasion of Ukraine, US refiners have become the biggest source of alternative diesel into Europe, shipping a record 237,000 bpd to the region so far in January, up from 34,000 bpd at the start of 2022.

Saudi Arabia and the United Arab Emirates are also plugging the gap.

EU energy chief Kadri Simson said on 15 January: "We believe that we gave sufficient time for our markets to react and find alternative supplies."

“We have mapped all of those alternative supplies. We believe that we are prepared, and on top of that, we do have strategic oil reserves [which] gives us additional confidence,” she added.