Nearly 2 million barrels of Russian diesel fuel stuck at sea because no one wants to buy it

  • According to Kpler data cited by Bloomberg, there are 1.9 million barrels of Russian diesel fuel in offshore storage facilities.
  • This is the highest since October 2020, when energy markets were still reeling from the COVID-19 pandemic.
  • Warm winter and new sanctions reduced demand for the product.

According to Kpler data cited by Bloomberg, 1.9 million barrels of Russian diesel fuel have been delivered to floating storage facilities due to a lack of buyers.

This is the biggest accumulation at sea since October 2020, when global energy markets were still reeling from the COVID-19 pandemic that caused a sudden drop in demand.

Last week, a record number of Russian diesel cargoes sailed without a destination, Bloomberg reported.

A growing inventory of unsold diesel fuel comes as an unusually warm winter has led to reduced heating fuel consumption.

Meanwhile, the European Union imposed additional sanctions on Russia in early February, banning refined petroleum products and imposing price caps along with the G-7 countries.

Before the sanctions went into effect, Europe imported a significant amount of fuel in preparation for winter. But due to a warmer-than-usual season, demand for diesel fuel has declined, and Europe has accumulated the largest stock of fuel in recent years.

Russia is also having difficulty finding buyers for its crude oil. The cargo of Russian oil is heading to West Africa, a region where oil is produced and where supplies from Moscow appear to be of little use.

A tanker named Tezei arrived in Ghana on Friday with about 600,000 barrels of Russian oil, according to Bloomberg. Ghana itself is an exporter of crude oil and sits next to Nigeria and Angola, two of the largest oil-producing nations in sub-Saharan Africa.

The EU similarly banned Russian oil and introduced a price cap in December. The punitive measures are part of a series of Western sanctions since Russian President Vladimir Putin launched a war against Ukraine last February.

The embargo and price caps are designed to keep Russian energy on the world market while hurting the revenue the Kremlin can make for its war effort.

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