The UAE’s key regional oil trading ports are on track to handle record volumes of fuels and other oil products this year in what traders say reflects displaced supplies from Russia, growing Iranian exports and new refineries in the region, says an article published on sp global website.
Displaced Supplies And Growing Exports
The UAE’s key regional oil trading ports are poised to handle record volumes of fuels and other oil products this year. Traders attribute this surge to displaced supplies from Russia, increasing Iranian exports, and the establishment of new refineries in the region.
Smaller, lesser-known oil ports in the UAE have witnessed significant gains in traded volumes, driven by reshaped trade flows in the aftermath of the Russian-Ukraine war.
Russian Barrels And Trade Reshaping
Tanker tracking data reveals a notable increase in the UAE’s imports of Russian clean oil products, indicating a deeper engagement of traders in the region with Russian oil.
Displaced Russian barrels, no longer finding markets in Europe and the US due to sanctions, are redirected to UAE ports, including Fujairah, Jebel Ali, and Hamriyah.
Surge In Overall Flows
Overall, UAE ports have experienced a surge in traded volumes this year, despite domestic production constraints imposed by OPEC quotas. Ports like Jebel Ali, Hamriyah, Khor Fakkan, and Fujairah have witnessed increased product exports, reflecting a robust trading environment.
Key Role In Diverting Russian Exports
UAE ports, especially Fujairah, have become crucial in diverting Russia’s oil product exports away from traditional markets in the US and EU. Smaller ports are also handling Russian cargoes, contributing to the overall surge in traded volumes.
Challenges In Tracking Origins
The nature of oil products makes it challenging to track their origins once in storage tanks, enabling the potential blending or rebilling of sanctioned products. Regulatory oversight varies across ports, with Khor Fakkan, in the emirate of Sharjah, seen as having less stringent regulations than Fujairah.
Growing Iranian Exports And New Refineries
Ports like Khor Fakkan and Hamriyah have played a role in handling increasing product exports from Iran. Additionally, the expansion of refineries, such as ENOC in Dubai, has contributed to incremental trade in barrels.
Industry Dynamics And Future Expansion
The UAE has long aimed to be a regional and global products trading hub, and the surge in volumes underscores progress toward this goal. Despite challenges, including regulatory oversight variations, the UAE remains a key player in the evolving dynamics of the oil trade.
Fujairah, as a major trading and bunkering hub, is set to expand its oil storage capacity in the coming years, further solidifying its position in the industry.
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Source: sp global
