Russia Resumes Diesel Exports After Short-Lived Ban


Russia has lifted its ban on seaborne exports of diesel, which was imposed last month to curb domestic fuel inflation. The ban had caused a spike in diesel prices in Europe, as Russia is the largest exporter of the fuel in the world.

According to a statement on the government’s Telegram account, Russia will allow diesel exports to resume, provided that the fuel is delivered to the nation’s ports by pipeline. This covers most of the exported volumes, as Russia shipped more than one million barrels a day of diesel-type fuel by sea this year.

Russia Resumes Diesel Exports After Short-Lived Ban
Russia Resumes Diesel Exports After Short-Lived Ban

However, the government also imposed some conditions to ensure sufficient fuel supplies at home. Exporters must keep at least 50% of their diesel output for domestic consumption, and those who do not produce their own diesel but buy it from the local market will have to pay a high export duty of 50,000 rubles (almost $500) per ton.

The government also restored its subsidies to refiners, which were halved last month to save budgetary spending amid the rising cost of the war in Ukraine. The subsidies are meant to compensate refiners for the difference between domestic and international prices, and to prevent fuel shortages in Russia.

Impact on Global Markets

The ban on diesel exports had roiled global markets, as diesel is used in various sectors such as shipping, farming, manufacturing and construction. The ban also came at a time when global diesel supplies were already tight, due to OPEC+ crude oil cutbacks and refinery outages.

The ban had driven up European diesel prices to their highest level since 2014, creating a supply crunch and a scramble for alternative sources. Some European countries, such as Germany and France, had even considered releasing their strategic reserves to ease the situation.

The lifting of the ban is expected to ease some of the pressure on the market, but analysts warn that it may not last long. Russia may still face domestic fuel challenges ahead of the presidential elections in March 2024, and may resort to similar measures again if inflation persists.

Implications for Energy Transition

The diesel export ban also highlighted the challenges and opportunities for energy transition in Europe and beyond. Diesel is one of the most widely used fossil fuels in the world, but it also contributes to greenhouse gas emissions and air pollution.

The ban had exposed Europe’s dependence on Russian diesel, and prompted some calls for diversifying energy sources and accelerating the shift to cleaner alternatives. Some experts suggested that the ban could be a catalyst for boosting renewable energy and electric vehicles in Europe, as well as reducing energy demand and improving efficiency.

However, others argued that the transition would not be easy or fast, as diesel still has many advantages over other fuels in terms of availability, affordability and performance. They also pointed out that Russia may not be willing to lose its market share and influence in Europe, and may use its energy leverage to counter Western sanctions and pressure over Ukraine.


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