Russia’s oil firms discussing diesel export ban for non-producers: Report

Russian oil companies have held talks with the government on whether firms that do not produce diesel should be banned from exporting it because of concern the refiners may be losing subsidies, Interfax news agency reported on Tuesday.

Russia is the world’s biggest seaborne exporter of diesel, just ahead of the United States, and diesel represents the greatest share of its oil product exports.

It imposed a temporary ban on diesel exports last year and media reports have emerged Russia is considering another ban to try to contain rising domestic prices.

Interfax, citing unnamed sources, said the possible ban on fuel exports was on the agenda of a meeting on Tuesday on the domestic fuel market chaired by Russian Deputy Prime Minister Alexander Novak.

High prices of diesel, whose local Russian index has reflected an expensive winter grade from Oct. 1, could lead to the cancellation of, or a significant decrease of subsidies known as damper payments. They were introduced to compensate local fuel producers for giving priority to the domestic market over usually more lucrative exports.

Russian exports about 35 million metric tons of diesel annually.

A government statement said Novak discussed the situation on the fuel market, fuel transportation via railways and supplies to farmers.

It did not mention diesel export restrictions, while saying that the domestic market is fully provided with gasoline and diesel. Novak’s office has not replied to a request for comment.

While refineries are responsible for most of Russia’s fuel shipments, some diesel is shipped by various traders and other companies that do not produce fuel.

Russia already has gasoline export restrictions in place until the end of the year.

Since a full EU embargo on Russian oil product imports was imposed in February 2023 over the conflict in Ukraine, diesel supplies have been diverted to Brazil, Turkey, countries in Africa, Asia and the Middle East as well as ship-to-ship (STS) loadings.