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

Kremlin spokesperson Dmitry Peskov said Sept. 25 that for Russia to lift its diesel export ban and flood international markets, countries that have imposed sanctions on Russia should lift bans on importing Russian diesel, the Tass news agency reported.

Local media previously reported that large Russian refineries will be banned from exporting until the end of October. A ban on non-producers exporting is in place until the end of January 2027.

Peskov said that meeting domestic demand, building reserves, ensuring safety of shipping in the Black Sea and opening up exports is not enough for Russian diesel to flood international markets.

"For international markets to be saturated, diesel must be able to reach them without barriers, that is, without any sanctions, restrictions, and so on," Peskov said.

The EU prohibits the import of seaborne crude oil and refined petroleum products from Russia. In cooperation with the UK, G7 and Australia, it is also imposing a price cap on exports of high-value Russian products, including diesel, of $100/mt.

Since these measures were introduced, conflict in the Middle East has disrupted oil processing and supply from the region. Russian export bans have exacerbated supply fears.

The Russian market faced ongoing supply disruptions of motor fuel this summer due to Ukraine scaling up drone strikes on refineries, which led to enforcing the full diesel ban in July. Recently, however, diesel availability on the domestic market has improved, as demand from the agricultural sector is gradually winding down and as some refineries have restarted, albeit partially.

In a bid to prevent global market shortages, the US government called for Ukraine to stop attacking Russian refineries, but strikes have continued.

The Perm and Novoshakhtinsky refineries were targeted Sept. 25, according to statements from Russian and Ukrainian authorities.

The US is also considering introducing a diesel export ban, which would take further supply away from Europe. Prices have risen steadily since mid-summer. Platts, part of S&P Global Energy, assessed 10ppm CIF NWE cargo at $1,556/mt on Sept. 24, up from $880/mt on June 18.