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💵 How to make money on an oil smoothie
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🛢️ Demand for oil storage tanks in Singapore is growing rapidly: the city-state's reserves are actively used to obtain new benchmarks. It is here that the stream of suddenly cheaper Russian fuel is mixed with more «legitimate» raw materials and re-exported. Such a scheme helps to hide the real origin of the goods.
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Flows of Russian crude oil and fuel to Asia and the Middle East have increased dramatically; such deliveries are increasingly directed to global logistics centres, such as Singapore or Fujairah (UAE). Large buyers do not want to work with politically «toxic» raw materials, but in these regions, it can be made «clean».
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Singapore has not officially banned the import of Russian oil, although the country's financial institutions are discouraged from doing business with Russian companies. Data from the shipping company
Vortexa Ltd. showed that Singaporean terminals accepted more than 2.6 million barrels of raw materials from the Russian Federation, which is almost 40 times the volume of 2021.
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The need for short-term (spot) storage of oil products will be especially relevant in the coming weeks, as Europe prepares to impose new sanctions on Russian oil products from February 5th.
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Now all types of raw materials from the Russian Federation (gas oil, oil, fuel oil) are accumulated in Asian hubs since the countries of the region do not have a common political position on the subject of anti-Russian sanctions. In huge tanks, the fuel can be mixed and, after rebranding, it is quite legal to re-export. This process, together with the high cost of renting storage facilities, brings 20-25% net profit, and at the same time, all legal formalities are observed. Reputational losses in this process are not taken into account by Asian businesses.
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Profits to y’all!