Russia may increase diesel fuel supplies to foreign markets, including the US, amid the domestic market's transition to winter grades. The change of season will free up summer diesel, and reduced domestic consumption creates additional export opportunities. At the same time, experts point to the difference between the capabilities of Russian oil refineries and the scale of the impact of individual supplies on world prices.
Recall that on October 9, the US Treasury Department announced a temporary permit for operations with Russian diesel fuel that were previously subject to sanctions. US President Donald Trump stated that Russia intends to increase fuel supplies to the world market, and additional supply should help lower prices.
Why Russian diesel may enter the American market
Konstantin Simonov, a professor at the Financial University, believes that the announced volumes are not large enough to independently eliminate the deficit in the world market. According to his estimates, the shortage of diesel fuel is 4–6 million tons per month, while the initially discussed supplies from Russia over a month and a half do not reach 1 million tons.
If we assume that all of this goes to the American domestic market, honestly, it's a little more than the daily diesel consumption of the United States.
In his opinion, in the initial stages, not only the physical volume of fuel is important, but also the market's reaction to statements about a possible increase in supply.
The expert believes that expectations of a rapid price reduction are largely due to the public effect of the agreements. If market participants believe in increased supplies, quotes may react even before the entire declared volume reaches buyers.
Transition to winter fuel will free up summer diesel
Additional resources for export may appear due to the seasonal restructuring of the Russian market. With the onset of cold weather, the need for winter diesel fuel, designed for operation at low temperatures, increases. Summer grades are less suitable for frosty weather, so as the transition to winter fuel occurs, their volumes can be directed for export, provided quality requirements are met and domestic consumers are supplied.
Igor Yushkov, a leading expert at the National Energy Security Fund, explains the potential growth in exports by a combination of several factors: Russian refineries produce significant volumes of fuel, domestic consumption is decreasing, and the transition to winter grades frees up summer diesel.
Russian refineries are capable of producing the volumes that are being declared. But in any case, it is logical from the point of view that the volume of consumption in Russia will decrease, we are already seeing this.
According to him, with a decrease in domestic demand and continued high output, manufacturers have an additional volume that can be sent abroad. The expert emphasizes that exports must take into account the needs of the Russian market and not create a fuel shortage within the country.
Yushkov also points out that it is not fundamentally necessary for the US to receive all Russian diesel directly. If additional volumes enter the world market, this can increase supply and affect prices in different countries, including the United States.
Is there a diesel shortage in Russia
The ability to increase exports does not mean that Russia's domestic market is fully supplied with diesel fuel. The authorities have repeatedly extended restrictions on the export of petroleum products precisely to maintain domestic supplies. The situation was also affected by attacks on oil refineries and refinery repairs, which reduced available capacity. At the end of September, the government again extended the ban on diesel exports by direct producers until October 31, 2026. Therefore, estimates of free volumes for foreign buyers must be considered taking into account the state of Russian refining and the needs of the domestic market.
The seasonal transition to winter diesel grades and reduced demand can indeed free up some summer fuel for export. However, this does not negate the risk of local shortages: even with sufficient all-Russian production volume, individual regions may experience difficulties due to refinery disruptions, logistics, or the need to replenish stocks.
On October 10, it became known about the partial lifting of restrictions on diesel fuel exports from Russia. This decision is due to the fulfillment of agreements between the two presidents and comes into force on October 10. It will allow 500 thousand tons of diesel to be sent to the world market.