Commodities trading giant Trafigura Group is working on deals to supply Europe with fuel once deliveries from Russia are all but cut off early next year.
The company has played a pivotal role in supplying middle distillates -- industry jargon for jet and diesel-type fuels -- into continental Europe over the last year, through both term contracts and spot cargoes, a spokesperson said in response to emailed questions from Bloomberg.
“This role becomes increasingly important in 2023, given the supply disruption from the Russian embargo,” the spokesperson said, adding that Trafigura complies with sanctions. “We are working with our European customers on securing their supply for calendar 2023.”
Trading houses have long played a significant role in supplying Europe, looking to profit from shipping in vast quantities of diesel and other fuels. Now, as the European Union’s ban on seaborne Russian barrels draws closer, buyers are under pressure to secure alternative supplies. That’s a potentially lucrative opportunity for firms like Trafigura.
Trafigura is not the only company working on securing supplies of diesel for Europe next year: Wilhelm Hoyer GmbH & Co. will, for instance, receive as much as 250,000 tons of diesel a month in 2023 from Abu Dhabi National Oil Co.
There’s a massive amount of Russian diesel-type fuel to replace. Last year, shipments from Russian ports into Europe -- excluding Turkey -- totaled more than 680,000 barrels a day, according to Vortexa Ltd. data compiled by Bloomberg.
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