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Russia’s Diesel Exports Set To Fall To Near Zero In October

Russia is appearing to make good on its diesel export ban in October, with loadings from Russian ports on the Black and Baltic Sea set to drop to near nothing for next month.

Russia’s loading schedule for October includes 223,000 thousand tons—222,800 thousand tons of which are set to be loaded in Primorsk and Novorossiysk for customers in the Eurasian Economic Union, which are exempt from the ban.

Russia announced in September a ban on most diesel exports from its western ports in an effort to stabilize fuel prices at home, but later lifted the ban on low-quality diesel. Russia is eagerly pursuing measures that would stave off a repeat of the 2018 fuel crisis. In November 2018, Russian President Vladimir Putin saw his approval ratings drop to a low not seen in six years, mainly due to higher prices at the pump, which saw a 7% increase since May. The government’s response was to have oil companies and independent fuel refiners hold wholesale prices at June 2018 levels until the end of the year. Russia then agreed to allow fuel prices to increase in line—but only in line—with inflation.

The move was largely seen as a political, populist, and short-term stop-gap measure.

With the war in Ukraine, Putin is unlikely to tolerate fuel shortages that could influence the approval of the populace.

Russia’s export ban that looks like it will take full effect in October could exacerbate an already tight global diesel market, driving crude and middle distillate prices ever higher ahead of winter. Crude oil prices are already rising, with Brent still trading over $95.

Europe’s diesel prices rose after the ban was announced, reaching as high as $1008 per metric ton. The ban is expected to be temporary, with Russia’s diesel storage tanks eventually set to reach full capacity.

By Julianne Geiger for Oilprice.com

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  • Francisco Napoleao on September 30 2023 said:
    Interesting you noted that Central Asia is exempt from the ban. Russia had to slow down production due to the price cap and the EU embargo. Diesel and Gasoline have expiring dates so it has to be delivered to its end consumers fast. This complicates the EU supply that has never really self-sufficient. Now that we see Germany, Bulgaria and Italy missing up with russian owned refineries they capacity is running low by using other crude oils. So Central Asia is ordering huge amounts of russian diesel to reexport it to other countries. I am not sure the Russians do blind eyes to it. This has all to do with war. Russia has finally to reduce the supply of diesel to Ukraine, which was being imported from the Russian refinery in Burgas in Bulgaria. Germany's parliament just approved that it was legitim to use german Taurus rockets to target positions deep inside Russian territory. I wonder if the Russians will keep allowing Kazakhstan to use their pipelines to supply Germany. Hate, Love & Fuels, what a romance.

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