Ukraine eases customs checks on diesel from sanctioned ports

Ukraine has eased customs procedures for imported diesel fuel arriving from ports and terminals on its sanctions list, according to Ukrainian media outlet Enkorr.

Ukraine's energy customs office has received approval from the Security Service of Ukraine to allow unhindered clearance of diesel cargoes, with no additional checks or sampling, Enkorr said Aug. 18. The change means fuel shipments that would typically face heightened scrutiny can now move through customs without the delays associated with the additional verification procedures.

Ukraine's energy customs office did not respond to an Aug. 19 request for comment on the policy change from Platts, part of S&P Global Energy.

The relaxation of import controls comes as Ukraine seeks to bolster domestic diesel supplies as the global diesel market has significantly tightened due to the ongoing Middle Eastern conflict and the Russian export ban.

While Ukraine is not directly affected by the ban, the tighter global market has left many diesel-importing countries competing for scarce distillate supplies.

The security service included 32 ports and terminals in its list of risky facilities in October 2023. That list has been repeatedly adjusted and supplemented since its initial publication, though the specific facilities currently included have not been publicly disclosed.

The initial 2023 list published by Enkorr included one port in Algeria, one in India, nine ports and terminals in Bulgaria potentially associated with Russia's Lukoil, and 16 facilities in Turkey. In addition, there were two ports and terminals from Saudi Arabia and the UAE, and Moldova's Giurgiulesti International Free Port.

Low-water Danube impacts shipments

Since the start of Russia's full-scale invasion of Ukraine in 2022, Turkey has become the main recipient of seaborne Russian diesel, gasoline and jet fuel exports, as well as one of the top three recipients of the country's crude supply, according to S&P Global Commodities at Sea data. India has been the top buyer of Russian crude since 2023, CAS data shows.

Russia has banned exports of gasoline, diesel and jet fuel amid Ukraine's attacks on Russian energy infrastructure, which led to a major refining crisis in the country. Diesel exports are restricted until the end of August, while gasoline exports will remain banned until the end of January 2027.

Ukraine has also reported shortages of motor fuel amid increased Russian attacks on its infrastructure. Ukraine's own diesel production has been very limited, with its Kremenchuk refinery being largely idle over the past few years.

Romanian ports and terminals have become the main hub of fuel shipments to Ukraine, according to S&P Global Energy CERA. Another key water route is the Danube River, where Ukraine also has ports, but the waterway has been limited by historically low water levels.

Enkorr reported that 22,000 metric tons of diesel of Indian origin entered the Ukrainian market in August, and more than half of the volumes were imported by the company BRSM-Nafta from the Turkish terminal Opet in Marmara.

Despite these deliveries and eased customs procedures, Enkorr sources said Ukrainian traders still try to refrain from Indian deliveries whenever possible.

Romanian ports have received diesel and gasoil vessels from Greece, Egypt, Israel and Albania so far in August, while Saudi Arabia, Greece, Turkey, Italy and Israel delivered vessels to Romania in July.

The physical Amsterdam-Rotterdam-Antwerp diesel crack stood at $88.45/barrel on Aug. 19, up from an average of $71.71/b in July and $44.75/b in June, according to Platts assessments.

Platts assessed the benchmark diesel Northwest European cargo price at $1,366.75/mt on Aug. 19, up from an average of $1,169.89/mt in July and $986.59/mt in June. The Mediterranean cargo price stood at $1,418.5/mt, up from the July average of $1,194.79 and the June average of $992.65/mt.