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Russian Diesel, Jet Fuel Export Limits Would Add Price Pressure
Country, Which Is Weighing Curbs, Sells Roughly 40% of Its Diesel Production to Foreign Markets
Key Takeaways:
- Russia is considering limiting diesel and jet fuel exports after oil companies were advised May 26 to curb foreign sales, Interfax reported.
- A ban could pressure global oil product prices because Russia exports roughly 40% of its produced diesel.
- Deputy Prime Minister Alexander Novak said reliable domestic fuel supply remains the priority and called for continued monitoring of the market.
Russia is considering limiting exports of diesel and jet fuel, according to Interfax, as refinery run rates fall to multiyear lows amid Ukraine’s escalating attacks.
Oil companies were advised to curb sales of oil products to foreign markets following a May 26 meeting with Deputy Prime Minister Alexander Novak on the domestic fuel market, the Russian news service reported, citing several people familiar with the situation. One of the people said the decision to ban exports of diesel and jet fuel is at an advanced stage, but the date for the ban hasn’t yet been set, according to Interfax.
If implemented, the ban will add pressure to global oil-product prices as Russia is a key exporter of diesel, selling roughly 40% of the produced fuel to foreign markets.
Ukraine has ramped up attacks on Russia’s energy assets, including refineries and oil pipeline infrastructure, in recent months. It’s a move meant to reduce the windfall revenues Russia has reaped since the conflict in the Middle East got underway.
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Russia’s average refinery runs dropped to 4.69 million barrels a day in April, the lowest in more than 16 years, according to estimates from analytics firm OilX. The intensity of the strikes threatens to send crude-processing rates even lower, just as Russia enters a holiday season when demand for fuels traditionally rises.
Novak’s press office didn’t immediately respond to a request for comment sent outside normal business hours. In a government statement, published after the meeting, Novak emphasized that “reliable and uninterrupted supply” of fuel to domestic market remains a priority.
“It is necessary to continue constant monitoring of the situation in the domestic oil product market to ensure coordination between federal agencies and companies, and, if necessary, to develop additional response measures in a timely manner,” Novak said in the statement.
