Russia Sees No Need for Diesel Export Ban, Novak Says

Russia’s government doesn’t plan to ban diesel exports again, Deputy Prime Minister Alexander Novak said on Friday, after Ukrainian drone attacks have reduced Russian refining capacity.   

Currently, Russia produces twice the volume of diesel than domestic consumption, Novak told reporters, as quoted by Russian news agency TASS.

“If we ban exports, we won’t have anywhere to put the diesel,” Novak said, adding that the Russian fuel market is stable, both in supply and prices.

“All the measures the government has recently taken ensure stable supply and stable prices,” the official noted.  

In the autumn of 2023, Russia banned exports of diesel and gasoline in an effort to stabilize domestic fuel prices in the face of soaring prices and shortages as crude oil rallied and the Russian ruble weakened. Prior to implementing the ban, Russia had raised mandatory supply volumes for motor gasoline and diesel fuel to deal with a supply crunch.

The ban on diesel and gasoline exports lasted only a few weeks.

But now Russia suspended gasoline exports from March 1 until August 31, 2024 to ensure supply for the domestic market in peak demand season.

Russia has seen its refining capacity diminished in recent weeks, due to seasonal maintenance, but most of all due to drone attacks from Ukraine, which have damaged several refineries that have shut down for repairs.

According to Reuters estimates, the amount of Russian oil refining capacity that has been taken offline due to Ukrainian drone strikes is 14% of Russia’s total refining capacity. Calculations show that 900,000 barrels per day of refining capacity have been taken offline by drone strikes, Reuters reported earlier this week.

Ukraine has stepped up attacks on oil refineries in Russia in recent weeks, which have reduced Russian refining capacity, and which, reportedly, have the White House concerned about rising international prices.

The United States has repeatedly urged Ukraine to halt its drone attacks on Russian oil refineries due to Washington’s assessment that the strikes could lead to Russian retaliation and push up global oil prices, the Financial Times reported last week, citing sources familiar with the exchange. 

By Charles Kennedy for Oilprice.com

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