Sulfur exports permitted under EU sanctions on Russian ports: EC

Sulfur exports are exempt from recent EU sanctions prohibiting transactions with several Russian ports, the European Commission clarified in an FAQ document published March 20.

"To the extent raw materials or components, including sulfur, are either used as fertilizers or as raw material to produce fertilizers, and provided further that their purchase, import or transport is not otherwise prohibited ... transactions ... are allowed," the EC said.

The recent sanctions, which went into effect Feb. 25, cast a pall of uncertainty over the sulfur market because they include Ust-Luga. The Baltic port is a major outlet for sulfur from Russia and Kazakhstan. In 2024, about 5.9 million mt of the oil and gas by-product shipped out of the port, according to S&P Global Commodities at Sea data. This represents about 15% of the roughly 38.5 million mt of sulfur traded globally in 2024, according to Platts data. Over half of Ust-Luga's exports, 3.2 million mt, went to Morocco, a major fertilizer producer, in 2024, according to CAS data. Brazil was the next-highest import destination, taking about 600,000 mt.

There is a carve-out in the EU's February sanctions for the "export, sale, supply, transfer or transport" of fertilizers, but it was unclear whether sulfur, a crucial raw material for many fertilizers, qualified.

"It's a step in the right direction," said one sulfur trader of the EC's clarification on March 21. On March 20, the trader said that while the uncertainty over the Ust-Luga restrictions had not eliminated avenues for sulfur trading, it had slowed trading. "People are still proceeding, just not with firm deals," he said prior to the EC's clarification.

Sulfur prices soar

The move comes as an undersupplied global sulfur market sees skyrocketing prices amid firm demand. Traders point to several factors behind the bullishness, including the recent entry of the Abu Dhabi National Oil Co. into sulfur trading through its trading arm, ADNOC Trading. Previously, the company, the world's largest sulfur exporter, had sold to traders and end users on a contract basis. Market sources have described the increased spot trading from ADNOC Trading as a "game changer" and expected it to lead to higher volatility.

Platts assessed its FOB Baltic sulfur spot price at $200-210/mt on March 20. Since November, the weekly average of Platts FOB Baltic sulfur spot price has nearly doubled from $105/mt to $205/mt.

Platts is part of S&P Global Commodity Insights.