Kazakhstan sharply cuts Russian fuel imports in March amid stockpiling

LONDON: Kazakhstan significantly cut Russian diesel and jet fuel purchases in March after stockpiling and amid low domestic demand, Refinitiv Eikon data showed and industry sources said.

Weak demand from Kazakhstan’s buyers weighs on a Russian market flooded with oil products as European companies drastically cut purchases of the state’s fuel amid Western sanctions over Ukraine.

Kazakhstan’s imports of Russian diesel fell to 3,700 tonnes during March 1-20 compared with 16,700 tonnes in February and 34,600 tonnes in January, rail data in Refinitiv Eikon showed. Imports of Russian jet fuel to Kazakhstan fell to just 186 tonnes in March compared with 2,500 tonnes in February and 22,300 tonnes in January.

At the same time, Kazakhstan’s stocks of diesel and jet fuel have risen in March from February, according to Refinitiv Eikon data.

Kazakh refineries are currently producing enough diesel and jet fuel, traders said, and the market is saturated.

Diesel prices at Kazakh refineries this week stand at $414-$479 per tonne including local taxes, which is half to two-thirds the prices on the European market, according to Refinitiv Eikon.

Traders believe that Russian producers may attract buyers in Central Asia in April by offering low prices for their products. Three large refineries in Kazakhstan provide the domestic market with gasoline, but dependence on imports of diesel fuel and jet fuel during periods of refinery repairs and high demand remains.