Russia lifts seaborne diesel export ban

Russia has allowed a return of seaborne diesel exports delivered to seaports via pipelines. A ban had been put in place on September 21st to deal with a mismatch between exports and supply at home. Domestic prices had been increasing because a weaker rouble and global demand meant that more money could be made by exporting the products. While this was good news for Russia’s foreign exchange, it was bad news for domestic politics, and presidential elections are coming up in March 2024. Hence the temporary ban.

The Russian government said that the restrictions on the export of diesel fuel were no longer applicable, provided the manufacturer supplied at least 50% of the diesel fuel produced to the domestic market.

Three-quarters of diesel, which is Russia’s biggest oil product export with close to 1m barrels per day, is transporter via pipelines, and only 25% by ship.

The Russian government said that it was also restoring full subsidies to refiners to ensure domestic fuel demand was met. It restored the fuel damper coefficient which will increase the amount of compensation to oil refineries for lost income when selling fuel on the domestic market.

A “protective duty” of RUB50,000 ($500) per tonne was put in place for resellers of petroleum products. The duty is supposed to prevent possible grey exports.