Russia's diesel export ban deepens global supply crunch

Russia's ​decision to ban diesel exports this week has roiled global energy markets, exacerbating shortages of the industrial fuel and sending prices ‌soaring, even in countries that no longer buy the fuel from Moscow.

Russia is the world's second-largest diesel exporter after the US, and refinery outages there can significantly affect global supplies of fuels.

Its exports were already slowing prior to ⁠the ban due to domestic shortages left by Ukrainian drone attacks.

Diesel and gasoil loadings from Russia were just 234,000 barrels per day from July 1 ​to 10, according to Kpler, down from 400,000 bpd in June and the 2025 average around 817,000 bpd.

Adding to pressure on diesel supply was a fresh ​wave of US attacks on Iran just hours after Russia announced the export ban on Wednesday, reviving concerns around vessel movements through the Strait of Hormuz and the toll it has taken on Middle Eastern exports.

US government data, also released on Wednesday, showed an inventory draw of more than 4.5 million barrels of diesel last week to 97.8 ​million as of July 3, or 6% below the five-year average.

The US ‌and Europe no ⁠longer import fuel from Russia, due to its invasion of Ukraine, but Moscow's export ban nevertheless sent prices for diesel surging in both regions, highlighting the globally interconnected nature of oil markets.

US ultra-low sulphur diesel futures surged 11% on Wednesday to $154 a barrel, or an $80 per barrel premium to WTI crude.

European low-sulphur gasoil futures, meanwhile, hit an all-time high premium to Brent crude futures of $60.77 a barrel on Wednesday.

A loss of Russian exports leaves less supply available ​globally, forcing regular customers such as Brazil and Turkey ​to compete with European nations ⁠and other importers for US cargoes. This could create knock-on effects for power and agriculture sectors.

-Reuters