Russia Lifts Export Ban On Low-Quality Diesel. Russia modified its fuel export restrictions on Monday, lifting the temporary prohibition on low-quality diesel and marine fuel exports.
Russia surprised the markets at the end of last week by announcing a temporary ban on exports of gasoline and diesel to stabilize fuel prices on the domestic market, putting an end to weeks of speculation that authorities would limit exports in the face of soaring prices and shortages caused by higher crude prices and a weak Russian ruble.
According to the Russian government, fuel already accepted for export by Transneft and Russian Railways before the suspension went into effect last week is also exempt from the restrictions.
The export prohibition on all types of gasoline and diesel of higher quality remains in effect, according to a government document cited by Reuters.
Before implementing the temporary restrictions, Russia increased the mandatory supply volumes of motor gasoline and diesel fuel to the commodity exchange to help alleviate the supply crisis.
When announcing the export moratorium last Thursday, the Russian government stated, “The temporary restrictions will help increase fuel supply on the market, resulting in lower prices for consumers.”
Russia has been contemplating a ban on fuel exports since May to prevent domestic fuel shortages and rein in prices following the announcement of a halving of oil refiner subsidies that will begin this month to finance its military operation in Ukraine.
Reduced diesel exports from Russia would not only reduce Putin’s revenues but also restrict an already constrained global diesel market.
Nevertheless, many analysts believe the temporary prohibition on fuel exports will be lifted within weeks.
According to analysts, Russia has limited storage capacity, so when the harvest season ends and domestic supply increases, Russia may need more time to be prepared to close fuel processing capacities due to export restrictions.