Turkish diesel cargo arrivals to the EU and UK have been steady in August, as the country establishes itself as a reliable supplier since the continent excluded Russian product and as supplies from east of Suez appeared to dry up.
The EU and UK imported 434,400t of Turkish diesel and gasoil between 1-21 August, according to Vortexa, already the third highest by volume for any month on record. Daily arrival rates suggest imports in the entire month are likely to be either the second or the highest of all time.
Turkey was the second largest diesel and gasoil supplier to Europe in the first three weeks of August, behind the US.
Turkey began ramping up its diesel and gasoil exports to Europe in earnest in April, after the EU and UK bans on Russian-origin oil products meant redirected Russian cargoes have helped match demand in a country that consumed more diesel than any European country apart from Germany and France.Turkish diesel exports have jumped as a result: they were around 320,000t in May, up by 9pc on the year, according to the latest figures from the energy market authority EPDK.
Turkish imports of Russian diesel surged to 1.097mn t that month, up from 377,000t a year earlier and the highest on record.
Turkish refineries have not faced any notable outages this summer, according to a trader in the region, which has probably enabled them to run hard and maximise diesel and gasoil production for export. European buyers made up 84pc of the Turkish diesel cargo export market between 1-21 August, according to Vortexa.
Turkey’s proximity to Europe makes it a more natural supplier given the lower effect of freight rates on arbitrage economics. By contrast, Europe has struggled to pull in supplies from east of Suez in recent months. Suppliers like Saudi Arabia and India have been more able to sell into Asia-Pacific thanks in part to lower freight rates.
This is despite European refineries being plagued by unscheduled maintenance issues and heat-induced drops in run rates. These have stoked concerns around diesel supply and have helped drive diesel cargo margins up to $36.08/bl against North Sea Dated crude in the first three weeks of August, from $25.70/bl in July.
But it remains to be seen if Turkey can maintain its position among Europe’s primary diesel suppliers. Russian product loadings have dropped this month because of stronger domestic demand. Diesel demand in Turkey is robust, with inflationary pressures leading buyers to front-load purchases, according to another trader operating in the region.
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