Sanctions Force Russia to Dump Naphtha Into Sts Transfers and Storage Hubs, Traders Say

Russia Redirects Naphtha Exports to STS Transfers Amid Sanctions

Impact of Sanctions on Naphtha Exports

MOSCOW/NEW DELHI, Feb 6 (Reuters) - Russia has increased naphtha export flows to ship-to-ship transfers (STS) and port storage hubs as key buyers scale back imports under the pressure of Western sanctions, traders said and LSEG data showed.

Shift in Export Destinations

Since the European Union’s full embargo on Russian oil products took effect in February 2023, most Russian naphtha has been directed to the Middle East and Asia. India and Taiwan have been among the main Asian buyers, but recent U.S. sanctions have prompted both countries to pull back. 

According to LSEG data, Taiwan has not imported any Russian naphtha since the start of 2026, compared with 2.7 million tons in 2025.

As traders avoided Russian cargoes, tankers carrying a total of about 180,000 tons of naphtha from U.S. ports appeared en route to the port of Mailiao in Taiwan, among other sellers, shipping data showed.

Trends in Naphtha Imports

India imported around 200,000 tons per month of Russian naphtha on average last year, but its purchases have almost halved as buyers say they will take cargoes only from non-sanctioned entities. 

According to LSEG data, of the three cargoes loaded at Russia’s Baltic Ust-Luga port in December, two — totalling around 100,000 tons — were discharged in India in early February, while the third, a 23,000‑ton shipment, is still waiting for discharge.

Exports of naphtha from Russian ports to Venezuela have also fallen to zero this year after U.S. President Donald Trump in December ordered a blockade on all sanctioned oil tankers entering or leaving the Latin American country.

Venezuela uses naphtha to dilute its extra-heavy oil to make it transportable.

LSEG data shows that of the tankers loaded with naphtha at Russian ports in December, one cargo initially destined for Venezuela is still drifting awaiting orders, while another 60,000‑ton shipment has been redirected to Oman.

Storage and Blending Operations

With major buyers stepping back from Russian supplies, traders have increasingly turned to STS operations near Port-Said, Egypt, as well as storage hubs in Singapore, Fujairah in the United Arab Emirates and Malaysia, shipping data shows.

Barrels held in storage could be blended and resold into Asian and African markets, market sources said.

Traders also note rising naphtha shipments from the Russian ports to Brazil and Togo, where they are mainly used for gasoline blending, though some volumes may also be stored and re-exported.

(Reporting by Reuters in Moscow with additional reporting by Mohi Narayan in New Delhi. Editing by Susan Fenton)