Russia has extended the diesel export ban for all producers until October 31, 2023. This action is due to delays in refinery repairs and the need to rebuild fuel reserves before winter. This ban, which was expanded in July from traders and small refineries to all producers, was set to expire on September 30.
Diesel Market Status in Russia
In early September, the price of diesel on the St. Petersburg commodity exchange reached 70,546 rubles per ton, and the retail price on September 7 reached 88.44 rubles per liter, indicating an 18.4 percent increase since the beginning of this year. The Russian Ministry of Energy has stated that these restrictions may be adjusted as the supply volume stabilizes and reserves reach adequate levels, although it did not specify what level would be sufficient for these adjustments.
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Impact of the Ukraine War on Refinery Capacity
Six major diesel refineries in Russia supply nearly half of the country's production, and three refineries, including Kirishi, Volgograd, and NORSI, are either completely shut down or operating at about 25 percent of their capacity. The Kirishi refinery has been completely shut down, while the Volgograd and NORSI refineries are operating at nearly 25 percent of their capacity. Additionally, the Tanko refinery was attacked on Sunday. Russia's diesel exports fell to less than 1 million tons in June, while during the same period last year, this amount was about 2.5 million tons per month, and countries like Turkey and Brazil have lost at least half of their previous shipments.
Energy analysts believe that these restrictions will impact the global diesel market and put pressure on prices. Diesel prices in the United States also reached a record $6.27 per gallon on Tuesday, indicating an increase of about 80 cents in a month and an increase from $3.69 last year. This situation has led some U.S. congressional representatives, including a Republican representative, to express their willingness to discuss a diesel export ban in the United States.
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