Moscow - Shipments of Russian diesel from Baltic to Mediterranean region opened in July as refinery run cuts in Europe and low freight rates offered opportunities for arbitrage trade, according to traders and Refinitiv Eikon data.
The arbitrage trade takes advantage of cheaper diesel in the Baltic and supplies the fuel to the Mediterranean where prices are higher.
The tanker Ardmore Dauntless that loaded at Primorsk port will supply 30,000 tonnes of diesel to Turkey’s Maramara port for the first time since at least 2015, Refinitiv Eikon data showed.
The tanker Huey that loaded at Primorsk on July 8 will ship 30,000 tonnes of diesel to Morocco, data also showed.
“The Mediterranean diesel market is very volatile these days, so we often see an arbitrage opportunity,” a trader in European oil product market said.
Traders expected more shipments of Russian diesel loading in July from Baltic ports and heading to the Mediterranean where refineries have cut output. Several Mediterranean refiners including Turkey’s Tupras cut runs due to weak margins.