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Russian pipeline operator Transneft resumed this weekend diesel exports from sea ports after Moscow conditionally allowed late last week the seaborne exports of diesel.
“Based on applications from oil companies, confirmed by the energy ministry, and declarations for them from the customs service, shipments of petroleum products began on Saturday,” Transneft representative Igor Demin told the TASS news agency on Monday.
On Friday, Russia lifted the ban on most of its diesel exports, two weeks after announcing export restrictions on diesel and gasoline to curb soaring domestic prices.
The Russian government said in a statement on Friday that as part of additional measures to keep the domestic fuel market stable, it is lifting the ban on exports of diesel delivered to seaports by pipeline, provided that the diesel producer supplies at least 50% of the diesel to the domestic market.
The ban on gasoline exports stays, for now.
The ban on diesel and gasoline exports, enforced on September 21, affected Russia’s diesel exports which have been diverted away from the EU after the embargo kicked in in February. Russia is now shipping diesel to Turkey, the Middle East, North and West Africa, and Brazil in South America.
Analysts have said they don’t expect a prolonged ban on diesel shipments, because of Russia’s limited storage capacity which, once full, could force refiners to cut processing rates.
On Monday, Russia’s Deputy Prime Minister Alexander Novak said that the easing of the diesel export ban was aimed at preventing storage capacity to overflow and crude processing rate cuts at domestic refiners. Only seaborne diesel exports are now allowed, and the ban on gasoline exports and on diesel exports by rail remains in place. The goal is to supply more fuel to the domestic market and prevent a spike in wholesale fuel prices, Novak added.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com