Constanta port becomes largest diesel importer in Med/Black Sea region

  Constanta imported 4.4 mil mt of diesel, gasoil in 2024 Port a key source of fuel for Ukraine since Russia's invasion Romanian demand also robust and likely to grow further   Constanta, a port on Romania's Black Sea coast, has seen diesel arrivals grow sharply since Russia's invasion of Ukraine to become the largest import location in the Mediterranean and Black Sea region, https://www.spglobal.com/ reports.   Prior to February 2022, Ukraine got most of its diesel from Russia. Since the start of the war and the imposition of sanctions on Russia, it has had to find new sources of supply.   Poland in the Northwest European market and Romania in the Mediterranean/Black Sea region have both become such new sources.   Constanta's diesel and gasoil imports in 2024 totaled 4.4 million mt, up from 1.6 million mt in 2021, S&P Global Commodities at Sea (CAS) data showed March 25, for a total 12.2 million mt from 2021-2024. Fos sur Mer (Lavera), the basis port of the CIF Mediterranean ULSD assessment by Platts, imported 3.9 million mt of diesel and gasoil in 2024, followed by Koper, the most active Mediterranean port reflected in the assessment, at 3.4 million mt and Venice at 3.1 million mt, CAS and Kpler shipping data showed. Platts is part of S&P Global Commodity Insights.   Besides being large suppliers for the Ukrainian market, Poland and Romania share a number of other key similarities.   Both are outside, or on the periphery of, the Platts assessment region. Since supply flows into Poland often originate from the same sources as the ones being assessed; Poland's Gdansk and Gdynia on the Baltic Sea coast, while geographically not part of the Northwest European region, are now reflected in the CIF NWE ULSD assessment,   Constanta, also outside the Mediterranean, is predominantly supplied with Med-origin barrels, coming out of Greek, Turkish and sometimes Egyptian or Italian refineries.   Unlike Poland in NWE, however, Romania is not reflected in the CIF Med ULSD assessment.   In addition, on the way to both locations, vessels have to pass narrow straits to reach their intended destination. Oresund Strait, between Denmark and Sweden, connects the North Sea with the Baltic Sea and Polish disports.   Equally, the Turkish Straits, which include the Bosporus and the Dardanelles, connect the Mediterranean Sea with the Black Sea and its Romanian disport.   Gdansk and Gdynia have also seen a substantial increase in diesel imports since 2021, following a somewhat similar trajectory to imports into Constanta.   In 2021, Gdansk and Gdynia's combined annual diesel and gasoil imports stood at 2.6 million mt, before surging to 3.9 million mt in 2024. While the rise was significant, it is nowhere near as steep or pronounced as that of Constanta, which has seen a nearly 3 million mt increase in imports in the past four years.   Constanta "is quite an important import location now because of the Ukrainian short," one European diesel trader said. "So, it would make sense of course to not ignore the location when you have 300 kt/month going there because in winter you have less LR2s doing this job."   Being a deepwater port, Constanta can easily accommodate larger vessels, such as LR2s or Suezmaxes. However, inclement weather in winter often complicates the passage of such vessels through the narrow Turkish Straits, which means that most of the diesel supply into Constanta in winter comes on Handysize tankers directly out of Mediterranean refineries.   Looking ahead, there is nothing to suggest that diesel demand into Constanta will not continue growing in coming years. The trend observed between 2021 and 2025 portrays a picture of sharp growth, while current market fundamentals suggest robust local consumption.   Romanian construction volume in January was up 30.8% year over year, according to the Romanian National Institute of Statistics on March 20. New construction works increased by 38.1% and capital repair works jumped 30.5%, while maintenance and current repair works rose 9.3% during the period. The construction of residential buildings soared by 71.3%, while engineering works rose 33.7%, and non-residential buildings saw an increase of 6.7%.   "The Romanian construction industry is booming," said a Turkish producer. Higher construction activity of course leads to higher consumption of diesel fuel, which is required for machinery and equipment.   Besides local demand, Constanta's diesel imports destined for the Ukrainian market are likely to remain strong. Even in the event the US lifts sanctions on Russian oil products, Europe, and especially Ukraine, are unlikely to follow suit. "Personally, I think they [Ukraine] will not buy any products for a long period of time and before that even Europe might not buy for a long time," said another diesel trader.   Moreover, a lot of Romanian import barrels "are also digested for export" to nearby countries, such as Moldova, Bulgaria, and Serbia, in addition to Ukraine. All of this points to Constanta remaining a large, relevant short with robust local demand and rising imports for the Ukrainian and other markets in the years to come.