LONDON - Russian diesel exports to Europe declined by 8% in May from the previous month to their lowest since October 2020, data showed, as traders slowly reduce purchases from Russia in response to tightening sanctions on Moscow.

The European Union on Monday agreed to cut 90% of oil imports from Russia by the end of this year, but previous EU sanctions on Russian banks and energy companies imposed following Moscow's invasion of Ukraine on Feb. 24 have already led traders to cut imports from Russia.

Russia's diesel exports to Europe dropped by 8% in May to 646,520 barrels per day (bpd), according to data from analytics firm Vortexa.

Russia accounts for 40% of Europe's imports of refined product, reaching 800,000 bpd in 2020, 55% of which was diesel and gasoil, according to Eurostat figures.

And although diesel imports from Asia, the Middle East and the United States have risen in recent months, imports from Russia have still exceeded those from other regions.

European diesel imports of non-Russian origin reached 522,404 bpd in May, according to Vortexa data.

"In the end, people are following rules that are essential for domestic markets and buying from non-sanctioned (Russian) entities," a trader told Reuters.

Many large traders including Shell and BP have stopped purchases of spot Russian oil cargoes and are winding down long-term supply deals with Russian suppliers.

As a result, European refining margins have risen to extremely elevated levels in recent months as buyers seek to replace Russian fuel.

Asian diesel refining margins jumped to $50.23 per barrel over Dubai crude on Tuesday, a new all-time high, according to Refinitiv Eikon data.

(Reporting by Ron Bousso; editing by David Evans)