Russia Extends Diesel Export Ban Through October

Russia will extend its ban on diesel exports for all fuel producers to October 31, Vedomosti reported Tuesday, citing delayed refinery maintenance and the need to rebuild fuel reserves before winter. The ban, expanded in July from traders and small refineries to cover all producers, had been due to expire September 30.Diesel on the St. Petersburg commodity exchange traded at 70,546 rubles a ton in early September, and retail prices reached 88.44 rubles a liter on September 7, up 18.4% since the start of the year. Russia's Energy Ministry said the current restrictions "may be adjusted" once supply volumes stabilize and reserves reach adequate levels, without naming a specific threshold.Russia's six largest diesel refineries account for roughly half the country's production, and three of them (Kirishi, Volgograd and NORSI) are now shut or running at about a quarter of capacity due to Ukrainian drone strikes. Kirishi is fully offline, Volgograd and NORSI are running near 25%, and Taneco was hit Sunday. Russian diesel exports fell below 1 million metric tons in June, down from roughly 2.5 million tons a month a year earlier, with Turkey and Brazil losing at least half their prior cargo allotments.U.S. President Donald Trump urged Ukraine on September 13 to stop "knocking out" Russian refineries, tying the strikes directly to U.S. pump prices. Energy analysts dispute the claim: a KSE Institute study puts Gulf-related export losses at 152 million barrels between March and August, more than double Russia's 68-million-barrel drop, and Russia's seaborne diesel exports account for roughly 4% of world trade.Diesel prices in the U.S. hit a record $6.27 a gallon on Tuesday, up about 80 cents in a month and up from $3.69 a year earlier, prompting the Senate's top Republican to say he's open to discussing a U.S. diesel export ban of his own. There is no real precedent for this in the U.S.. The crude oil export ban from 1975 to 2015 excluded diesel and gasoline, and refined-product exports have gone essentially unrestricted for decades. Rep. Ro Khanna has floated a separate Gasoline Export Ban Act in the House, and the White House denied any plans for either measure in August.By Charles Kennedy for Oilprice.comMore Top Reads From Oilprice.comHormuz Shipping Traffic Remains Stuck in Single DigitsGermany Weighs Market Incentives to Boost Record Low Gas Storage LevelTTF Gas Hits $92.95 as Gulf Tensions Weigh on Energy Markets