Russian oil output: shift to higher value products(file image/pixabay)
Russia dominates the world's fuel oil export market but is on course for further declines.
An analysis by business news provider Bloomberg identifies three oil companies as the key player in the export market.
State-owned Rosneft accounts for around a third of Russia fuel oil production. Last week, the company issued tenders to sell oil products in 2019 with fuel oil making up around 40% of total available volume.
Another big producer of fuel oil is Lukoil. Seventy-five per cent of Lukoil's fuel oil output comes from Nizhny Novgorod. However, the company is planning to reduce its fuel oil output from the plant from 2021 and the refinery has already repositioned its output to the needs of Russia's domestic market.
Gazprom Neft's has around 6% of Russian fuel oil production. That percentage is expected to fall as work at the company's Moscow refinery will remove fuel oil from its slate of products.
Global demand for fuel oil is expected to shrink once the International Maritime Organisation's tougher sulfur cap on bunker fuel comes into force in just over a year's time. The excess of supply is expected to lead to significant downward pressure of price. At the same time, Russian refinery policy has been to shift production away from fuel oil to higher value refined oil products.