RUSSIAN UPDATE
PANDEMIC HITS RUSSIAN MARKETS Olga Bogacheva reports lower port throughput in 2020 as oil exports slumped, and a big drop in bunker sales
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otal cargo passing through Russian ports in 2020 totalled 820.8 million tonnes, 2.3% down year on year. The decline was caused by a sharp reduction in oil exports. Modest growth of dry cargo throughput was not enough to compensate for the drop in oil cargoes. The most significant drop was in the ports of St. Petersburg and the Leningrad Region, down 6% to 231 million tonnes. Such a pronounced reduction has not been experienced for many years. Throughput had increased every year since 2009 except 2018. However, the situation was better in other regions. Throughput increased by 9.5% in the Caspian ports and by 4.6% in the Far East. Last year’s lower figures were entirely due to the effect of the pandemic on the global economy. However, the situation is forecast to improve soon. As stated in the government’s draft transport strategy, by 2035 cargo throughput at Russian seaports should have increased to 1.4 billion tonnes, and total port capacity should have grown by 68%, to 1.9 billion tonnes a year. Russian bunker market in 2020 With the unprecedented events of 2020 hitting most sectors of the world economy, bunkering in Russia was, unsurprisingly, badly affected.
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Volumes fell by 27.5% to a disappointing 7.9 million tonnes in total for all types of fuel. The market leaders kept their positions. The bunker divisions of vertically integrated companies - LUKOIL-Marine Bunker, RN-Bunker and Gazpromneft Marine Bunker remained at the top of the list of market players. Most of the bunker fuel was sold in the North-Western region (including the Arctic) – about 3 million tonnes. This was 20% less than in 2019. At St. Petersburg, the largest port in the North-West, fuel sales fell by 9% to 1.2 million tonnes. This was in large part because all cruise ship calls were cancelled. Unlike the country’s other regions, the four suppliers at the top of the list in St. Petersburg included two independent companies; Baltic Fuel Company and Nevsky Mazut which were in second and fourth place respectively. However, LUKOIL-Marine Bunker accounted for 40% of the total fuel supplied, with sales of nearly 500,000 tonnes. That was twice as much as Baltic Fuel Company delivered. Gazpromneft Marine Bunker took 16% of the market while Nevsky Mazut had 9%. In the ports of the Far East, fuel sales fell by 47%, totalling 2.4 million tonnes. The main reason was the lack of supplies
which resulted in uncompetitively high prices, but there were also problems with the quality of fuel. The ports of the Southern Region survived 2020 with the smallest drop in sales. Bunkering companies there delivered 1.9 million tonnes of fuel, only 2.7% less than in 2019. New oil refinery in the Far East “needed” Deputy Prime Minister Yuri Trutnev said recently that it is necessary to build a new oil refinery in the Far East. He said that action would be taken to respond to a lack of fuels, both marine and automobile, that occurs regularly in the region. Estimated total demand is about 6 million tonnes but only 4 million tonnes are produced in the region. The rest is delivered by rail, which makes it impossible to ensure continuity of supply and competitive fuel prices. An acute shortage of gasoline in the Khabarovsk Kray and in other Far Eastern regions arose in the first quarter of 2020 after a shut-down at the Khabarovsk refinery due to technical problems. Because that problem affected thousands of people and became a public concern, the refinery has been taken under federal control and at the time of writing, it was expected that production would resume soon.
World Bunkering Q2 2021