U.S. diesel crack tops $100 a barrel for first time amid global supply crunch

Russia has received its first shipment of gasoline from India, a reversal that underscores the toll Ukraine's sustained campaign against Russian oil refineries is taking on one of the world's largest fuel exporters.

The cargo, produced by Nayara Energy at its Vadinar refinery in western India, arrived at a Russian port on August 5, according to Bloomberg data cited by The Moscow Times. The Russian-flagged tanker Cyclone loaded approximately 42,000 metric tons of gasoline in mid-June and used a chain of shadow fleet vessels off the coast of Egypt to complete the delivery. Nayara Energy is partially owned by Rosneft, Russia's state oil giant.unn+1

Reuters Thomson Reuters Corporation ↘ 4.39% reported in early July that Russia had quietly begun purchasing Indian gasoline, with sources saying at least 60,000 metric tons had been dispatched. India's Oil Minister Hardeep Singh Puri acknowledged at the time that while Indian companies were not selling fuel directly to Russia, it was "possible" that Russia had purchased Indian-origin fuel via international traders.aljazeera

Refinery Strikes Deepen the Crisis

The imports come as Ukraine continues to strike deep into Russian territory. On August 11, Ukrainian drones hit the Orsknefteorgsintez refinery in Orsk, forcing a complete shutdown. Orenburg region Governor Yevgeny Solntsev said repairs could take up to six months because "shrapnel damaged key infrastructure that cannot currently be repaired" due to Western sanctions on imported equipment.themoscowtimes+1

Russia's refinery throughput fell to 3.6 million barrels per day in July — its lowest level since May 2002 and nearly one-third below the recent seasonal average, according to EA Analytics data cited by Enkorr. Globally, refinery crude throughput averaged 80.9 million barrels per day in July, down about 5 million bpd from a year ago, the International Energy Agency said last week.reuters+1

Global Ripple Effects

The disruptions are reverberating far beyond Russia. The U.S. diesel crack — a key measure of refining profitability — surpassed $100 a barrel for the first time on Monday, hitting an all-time high as supply constraints from wars in both Iran and Ukraine collide with peak agricultural demand.reuters

"The U.S. is producing more diesel, not less, and yet the crack is still above $100. That tells you this is not a refinery incentive problem anymore — it is a refinery capacity and global replacement-barrel problem," said Shohruh Zukhritdinov, chief executive of oil trading firm NitrolOil.reuters

Russia has banned international fuel sales through January as it struggles to supply its own market. Filling stations in at least 10 regions have imposed sales restrictions or run short of some fuel grades, with shortages now reaching the Moscow region. Gasoline sales on the St. Petersburg exchange have fallen by an average of 20% since the beginning of August.oilprice+1