Russian oil is being converted to gasoline in India and shipped back to Russia, marking a reversal in traditional energy trade routes.
Russian oil has been converted into gasoline in India and is returning to Russia via tankers.
Russia, whose refinery capacity has been reduced by attacks in Ukraine, is preparing for an unusual shipment that reverses traditional energy trade. A reported 42,000 tons of gasoline produced from Russian crude oil in India is being transported to the Vitino terminal in northern Russia after a ship-to-ship transfer conducted via the tankers AGNI and GARNET.
The trade chain in which Russia sells crude oil to India has now started to operate in the opposite direction. Following attacks on Russian refineries in Ukraine, Moscow is importing gasoline refined in India by sea.
According to reports by Reuters and the Financial Times based on Kpler data, the 42,000-ton gasoline cargo was loaded onto the tanker AGNI at Vadinar Port in India. The loading process took place between June 18-20.
AGNI did not take the gasoline directly to Russia. The tanker conducted a ship-to-ship transfer with a vessel named GARNET near the shores of Damietta, Egypt, on July 6-7. The entire cargo was transferred to GARNET. The ship then left the Mediterranean and headed north along the Norwegian coast. According to Kpler data, GARNET is expected to arrive at Russia's Vitino terminal around July 26.
This route places multiple commercial and geographical layers between the production site, seller, carrier, and final buyer of the cargo. A ship-to-ship transfer is not illegal in itself. However, due to sanctions complicating the determination of the cargo's origin, price, and actual buyer, these operations are being closely monitored.
Approximately 40% of Russia's refinery capacity is offline.
Sources speaking to Reuters estimate that due to the attacks in Ukraine, around 40% of Russia's refinery capacity may not be operational for at least two months. It has been reported that Rosneft, Gazprom Neft, and Lukoil are seeking additional gasoline from refineries in India.
Under normal circumstances, Russia is one of the world's major exporters of crude oil and petroleum products. In contrast, the damage to refineries has led the country to seek to reclaim its crude oil in processed form from abroad. This situation indicates that it is not the quantity in energy trade that is decisive, but rather processing capacity. Extracting crude oil is one thing; continuously producing gasoline that will enter a car's tank is another.
Rosneft owns 49% of Nayara Energy, which operates the Vadinar refinery. The Financial Times reported that a large portion of the crude oil processed at the refinery is sourced from Russia. Thus, the crude oil shipped from Russia to India is now returning as gasoline to Russia.
Nayara Energy denied claims that it sells or plans to sell gasoline to Russian companies. According to Reuters, the trade of the cargo was conducted through intermediaries. The Indian Minister of Petroleum also stated that Indian companies do not sell directly to Russia, but Russian buyers may purchase Indian-origin products through intermediaries.
Another tanker named VARG, which loaded gasoline from Vadinar, is also reported to be heading towards the Suez Canal, with plans to transfer its cargo to another vessel off the coast of Egypt. This situation indicates that the initial shipment may not remain a one-time exception.
Source: SeaNews Türkiye
