Sanctions and Strikes Squeeze Russia’s Fuel Oil Flows to Asia

Group 1 - Russian fuel oil exports to Asia are experiencing a decline for the third consecutive month, with current exports at approximately 246,000 barrels per day (bpd) [1] - The decline in Russian shipments is compounded by reduced fuel oil exports from Venezuela, potentially tightening the high-sulfur fuel oil (HSFO) market in Asia [2] - U.S. sanctions on Rosneft and Lukoil have intensified scrutiny of Russian cargoes, leading buyers to avoid potentially sanctioned supplies [2][3] Group 2 - Russian refinery output has significantly decreased due to Ukrainian attacks on energy infrastructure, with crude oil deliveries to refineries hitting the lowest level in at least 15 years [3][4] - In 2025, crude supply to Russian refineries fell to 228.34 million tons, resulting in a 1.7% drop in crude processing rates compared to the previous year [4] - The Russian industry anticipates continued lower processing rates and fuel output due to risks of further refinery outages and lack of economic incentives to increase processing [5]