North Africa diesel exports to Europe surge as Russia digs deeper into Ukraine

North African countries have increased diesel exports to Europe while importing more of the fuel from Russia after the country invaded Ukraine in February last year, according to data shared with Al-Monitor. 

In March this year, Morocco imported the most Russian diesel of the North African countries, shipping in 108,000 barrels per day (bpd), data from commodities firm Kpler shows. Tunisia and Libya are also active importers followed by Egypt. March has seen North African countries import 257,000 bpd of diesel from Russia, the highest amount since the beginning of the Ukraine war.

At the same time, North Africa has also seen its fuel exports, especially to Europe, rise since Russian President Vladimir Putin launched his full-scale invasion of Ukraine on February 23, 2022. Egypt has been by far the biggest diesel exporter in North Africa to Europe since the conflict began, the data shows. In March, it is projected to export 46,000 bpd to Europe, while Libya follows with 23,000 bpd.

North African countries are also snapping up other oil and gas products from Russia at discounted rates, analysts say.

“We are indeed seeing higher flows of Russian oil products to North African countries. While this is true for oil products and particularly for gas oil, it is not happening for crude,” Livia Gallarati, oil markets analyst at Energy Aspects, told Al-Monitor.

“Russian gas oil arrivals to North Africa have increased sharply since the end of last year, growing from an average of 20,000 bpd in the first half of last year to around 200,000 bpd in Q1 2023,” she added.

Morocco and Tunisia have been the most active importers in the region, Gallarati said, noting that West Africa is also importing more Russian gas oil since the war began.

“At the same time, Moroccan and Tunisian gas oil exports have also been increasing in recent weeks, hinting the countries might be re-exporting Russian volumes,” the analyst added. “Morocco has no active refining capacity while Tunisia only has one small 35,000 bpd refinery (the Bizerte refinery)."

“That being said, we think these flows will help move some Russian volumes into the global market but we expect them to remain relatively limited in scale, especially if they hope to remain hidden from the radar of Western authorities. Russia still needs to find other markets, such as in the Middle East and Latin America, for its gas oil. It will not be able to place everything in Africa," Gallarati said.

The Wall Street Journal reported in February that analysts suspected that North African countries could be re-refining Russia's oil and gas products and re-exporting them back to Europe.

Homayoun Falakshahi, senior commodity analyst at Kpler, said he would not go as far as saying North African countries are importing Russian diesel with the intention of exporting it back to European countries.

“I think this practice would be somewhat risky from a sanctions perspective,” Falakshahi told Al-Monitor. “While we see a big increase in imports of diesel from Russia, we do not see a comparable increase in exports to Europe, although these have increased a bit. In these cases, I think what's going on is that these countries are importing cheap Russian diesel, and they are exporting the surplus volumes that these imports create at home.”

His company's data appears to show Egypt as a major exporter of crude and LNG to Europe. However, the numbers are slightly skewed because Egypt’s volumes are all from the Middle East, primarily from Saudi Arabia, imported into Egypt and re-exported via the SUMED pipeline, Falakshahi said. The 320-kilometer pipeline runs from the Ain Sokhna terminal in the Gulf of Suez to the offshore Sidi Kerir port in the Mediterranean Sea.

In recent months European governments have been looking to find alternatives to Russian gas and oil. EU foreign policy chief Josep Borrell visited Algeria earlier this month to promote stronger energy and security ties with Africa’s top gas exporter. Some 90% of Algeria’s gas exports go to Europe. Italy also has sought to increase energy ties with Algeria in recent weeks.

On March 14, Morocco’s finance minister denied reports suggesting that the country had banned Russian gas and oil imports. Minister of Economy and Finance Nadia Fettah Alaoui said that Russian gas imports accounted for 5% of Morocco’s gas in 2021, before rising to 9% in 2022, showing an increase since the beginning of the war on Ukraine. She said the average price for Russian gas reached 9,522 dirhams ($916) per ton, compared to 10,138 dirhams ($975) per ton from other countries. Members of the People’s Movement party opposed the import of Russian diesel and accused the government of evading Western sanctions.

Falakshahi told Al-Monitor in February that due to Russia's main crude blend, Urals, having similar specifications as most Middle Eastern crude, it would make economic sense for some MENA countries to import Russian crude and then refine it into products before exporting them to Europe without the "Russian stamp."