Russian Oil Seeks New Markets in Africa

A surge of Russian oil, mostly low-sulfur gasoil, has hit North and West Africa over the past month as traders seek out new markets following the EU embargo on product imports that came into force on Feb. 5.

This reorientation of trade flows has not been without its problems, however. The first shipment of Russian crude to West Africa in more than five years — a 600,000 barrel cargo of light oil that was loaded at the Russian Black Sea port of Novorossiysk in late January — has been sitting outside the Ghanaian port of Tema for the past three weeks, according to multiple trading sources.

One of the most popular new destinations for Russian gasoil is Morocco. According to sources with access to port data, regular shipments are being made from the Baltic terminal of Primorsk to the Moroccan ports of Tangier and Mohammedia by small trading companies based in the United Arab Emirates that had barely been active in the Russian market until the start of the year. “You are seeing new names appearing with no prior involvement in the Russian business,” a trader who follows the North African market says. The source says the gasoil going into Tangiers is usually discharged onto small tankers and taken down the coast to Mohammedia.

There has also been an uptick in Russian gasoil volumes going into Tunisia, with three shipments due to arrive this month from Primorsk, according to port data. Russian products are also finding a market in Egypt and Libya, the data show.

Go West

West Africa is also stepping up its Russian gasoil purchases. According to a trading source, Senegal took delivery of five Russian cargoes in February into its main port, Dakar, and is on course to receive a similar volume this month. Some of the product is being supplied by Litasco, the Geneva-based trading arm of Lukoil which has been active in the West African market for more than 20 years, the source says.

Litasco is also supplying Russian gas oil to Ghana, but is getting paid in gold rather than cash, under a scheme the cash-strapped Ghanaian government introduced at the end of last year.

According to another trading source active in West Africa, Litasco delivered a 41,000 metric ton cargo to Dakar last month and is due to make at least one more shipment in March. The source says the payment in gold is arranged via a Ghanaian-controlled entity based in Dubai.

Complicated

Bringing Russian crude into Ghana has proved much trickier. The story around the Theseus, the St Kitts and Nevis-flagged tanker that has been anchored outside Tema since Feb. 24, is complicated. Owned by Mumbai-based Gatik Ship Management, the vessel was expected to offload the oil into storage tanks owned by the 45,000 barrel per day Tema Oil Refinery, which has been closed since 2018. Unconfirmed reports say the oil was sold to Platon Oil and Gas, a Ukrainian-run company which owns a small refinery in Ghana.

A Ghanaian media outlet, Joy News, claimed it had seen official documentation showing that the charterer of the ship was Bellatrix Energy, a little-known trading outfit domiciled in Hong Kong, and that the original load port was not Novorossiysk but the Kazakh Caspian port of Aktau.

The report could be not verified independently, and Bellatrix, which is run by a national of Azerbaijan, Bilal Aliyev, and has cropped up as a regular offtaker of Russian barrels over the past six months, could not be reached for comment. Trading sources familiar with the Caspian point out Aktau can only handle small vessels and that the Caspian Sea is landlocked, meaning there is no obvious route to get the oil to Ghana.