Russia says sanctions should be lifted for it to satisfy international diesel demand

Russia has urged the international community to lift sanctions in order to adequately meet global diesel demand, according to Kremlin spokesperson Dmitry Peskov. Peskov stated that in order for Russia to lift its own diesel export ban and flood international markets, countries imposing sanctions on Russia must also lift bans on importing Russian diesel, as reported by Tass news agency.

Local media had previously reported that large Russian refineries would be prohibited from exporting until the end of October, with a ban on non-producers exporting in place until the end of January 2027. Peskov argued that meeting domestic demand, building reserves, ensuring safe shipping in the Black Sea, and opening up exports alone is not sufficient for Russian diesel to saturate international markets.

He emphasized that diesel must be able to reach international markets without facing any sanctions, restrictions, or other barriers. The EU currently prohibits the import of seaborne crude oil and refined petroleum products from Russia and is imposing a price cap on exports of high-value Russian products, including diesel, at $100/mt.

This comes amid global supply concerns due to the Middle East conflict disrupting oil processing and supply. Russian export bans have further exacerbated these concerns. The Russian market experienced ongoing supply disruptions of motor fuel in the summer due to Ukraine intensifying drone strikes on refineries, leading to the full diesel ban in July.

However, diesel availability on the domestic market has improved as demand from the agricultural sector declines and some refineries have partially restarted. The US has called on Ukraine to halt attacks on Russian refineries, but strikes have continued, including on the Perm and Novoshakhtinsky refineries on September 25, according to statements from Russian and Ukrainian authorities.

The US is also considering imposing its own diesel export ban, which would further reduce supply to Europe. Prices for Russian diesel have risen steadily since mid-summer. Platts, a division of S&P Global Energy, assessed a 10ppm CIF NWE cargo at $1,556/mt on September 24, up from $880/mt on June 18.