February 24, 2024
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OIL & GAS

Traders Divert Russian Oil Product Cargoes Around Africa

Traders are rerouting cargoes with Russian oil products around Africa to avoid the heightened risk of attacks by Yemen’s Houthi rebels in the Red Sea, according to data from market sources and the London Stock Exchange Group (LSEG).

The move comes after the EU imposed a full embargo on Russian oil products in February 2023.

Fuel oil, vacuum gasoil (VGO), and naphtha cargoes from Russian ports to Asia and the Middle East are being rerouted through the Suez Canal and around Africa as a way to avoid the Red Sea and the Houthi threat.

A fuel tanker Marlin Luanda, carrying Russian naphtha, was attacked in the Red Sea by Houthi rebels last week, further escalating concerns about the safety of shipping in the region.

Traders are now opting for the longer route around the Cape of Good Hope to avoid the Red Sea, facing challenges such as refueling and restocking decisions and rough sea conditions.

Shipping data from LSEG shows that vessels loaded with fuel oil and VGO at Russian Baltic ports are now skirting the coast of Africa on their way to destinations in India and Singapore.

Other vessels, including one loaded with Russian fuel oil, have been rerouted and are awaiting near the Senegal port of Dakar.

The U.S. and Britain have launched strikes on Houthi targets in Yemen, reinstating the militia in a list of terrorist groups to mitigate future attacks.

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