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Russia has banned exports of diesel after Ukrainian drone attacks on its refineries triggered the country’s rapid descent into its worst fuel crisis since the collapse of the Soviet Union, while putting further strain on global energy markets.
Announcing the decision on Wednesday evening in a video meeting with President Vladimir Putin, Russia’s deputy prime minister Alexander Novak said the situation with fuel supply remained “uneasy” despite the state’s efforts to “stabilise” it.
The move, which Novak said would be in place until July 31, will add to the pressure on global fuel supplies triggered by the Iran war just as US President Donald Trump declared the fragile ceasefire between the US and Iran to be “over” and removed a temporary waiver of sanctions on Iranian oil.
Russia is normally the world’s second-largest exporter of diesel, and has been rerouting its exports to countries such as Brazil, Turkey and the Middle East after the EU shunned its products following the full-scale invasion of Ukraine in 2022.
Diesel prices in the US climbed more than 13 per cent following the announcement, which followed a roughly 5.49 per cent increase in the price of crude oil as shipping through the Strait of Hormuz again slowed to a trickle.
Wholesale diesel futures in London rose as much as 14 per cent on Wednesday to $1,114 a tonne, the highest level in a month.
“It is undoubtedly very bullish [for] diesel,” said Neil Crosby, head of oil research at data company Sparta. “It has been feared for several weeks now, and there is no reason to suspect Ukraine will cut back the attacks.
“There isn’t enough capacity in the market now to make up for zero Russian diesel exports and perhaps even imports.”
Russia’s restriction of exports — and need to import fuel — has helped to keep global refined product prices high, even as crude oil prices have dropped in recent weeks. That has been a boon for refineries but is likely to stoke inflation.
Even before the ban, Russia restricted diesel sales abroad for third-party traders. In June, the country’s diesel exports dropped to 7.93mn barrels, 45 per cent down month on month and 39 per cent below the three-month average, according to data from Kpler, an analytics company.
Last month, the UK deferred a ban on diesel refined from Russian crude oil in third countries, highlighting concern among ministers over potential energy supply strains.
Since late April, Ukraine has attacked all of Russia’s largest 10 refineries, including the biggest one in Omsk, where production was halted following an attack on July 6, as well as most of the smaller facilities.
Most Russian regions have had to impose some forms of restrictions on fuel sales, limiting the amount customers can buy or banning the use of canisters at service stations.
Ukrainian President Volodymyr Zelenskyy joked with US President Trump at the Nato summit in Ankara on Wednesday that he may not be able to meet Putin in Moscow as “there are lots of Ukrainian drones there. It’s dangerous”, in a sign of growing confidence in Ukraine’s ability to hurt Russia far from the front line.
Several Russian regions have introduced rationing measures under which cars with odd and even number plates are allowed to refuel on different days, a tactic once used in the US during the Arab oil embargoes in the 1970s.
Waiting times at fuel stations range from several hours to days, in one of the most visible signs for Russians of how the four-year war is now starting to affect life at home.
Speaking in the video meeting on Wednesday, Putin said that Kyiv aimed at “creating unease in the society”, which, he believed, “cannot be achieved.”
Diesel had historically accounted for the largest portion of refined fuels output in Russia, with the country producing two times more diesel than it consumed while petrol production surpassed its consumption by only 10 per cent, said Sergey Vakulenko of the Carnegie Endowment for International Peace.
“The diesel export ban appears aimed more at calming domestic concern than at resolving Russia’s petrol shortages,” Vakulenko added.
This month, Russia would also start importing refined products from abroad, Novak said.
