Authored by Tsvetana Paraskova via OilPrice.com,
Russia's government on Wednesday extended the ban on exports of diesel, marine fuel, and gasoil for all fuel producers by October 31, which effectively extends the period in which the tightening global market will have to cope without Russian diesel shipments for another month.
The government took the decision to extend the ban, which has been in place since the summer, "to maintain a stable situation on the domestic fuel market, including to meet higher demand for fuel during the harvest season."
Russia has been extending the ban on diesel and other fuel exports by one month for months as Ukrainian attacks on Russian refineries are crippling domestic fuel production.
Ukraine continues its campaign to cripple Russian refining capacity, fuel supply, and export revenues.
Russia has been suffering from a gasoline and diesel crunch since the spring, when Ukraine intensified its drone attacks at Russian refineries, aiming to cripple fuel supply to the front lines and to the domestic Russian market.
The Russian ban on diesel exports has added to the Middle East crisis to tighten global middle distillate markets.
Before the ban on exports, Russia's diesel shipments accounted for about 10% of global seaborne diesel supply.
The disappearance of Russian diesel added to the slow and uneven exit of fuel cargoes out of the Strait of Hormuz and reduced refinery operations in the Middle East following several Iranian strikes at Gulf refineries at the start of the war.
"We have 7 million barrels a day of refineries down in Asia and the Middle East and another 1.4 million barrels down in Russia. And the refineries, depending on the damage and the ability to get spare parts, are going to take a good long time to get back online," Brian Mandell, Executive Vice President of Marketing & Commercial at Phillips 66, said on the Q2 earnings call in early August.
The limited supply from Russia and the Middle East has sent retail diesel prices to record highs, including in the United States, where the average price of diesel is $6.41 per gallon as of September 30.
By Tsvetana Paraskova for Oilprice.com