Russia to extend diesel ban, boost quotas, sources say

Russia plans to keep its diesel export ban in place through the end of 2026, while letting some companies export fuel under quotas so it can meet its new supply commitment to the United States. Two people familiar with the discussions told Reuters, via The Straits Times that quotas will quadruple from October levels to 2 million metric tons in November, or about 0.5 million barrels per day. The current ban expires on October 31.straitstimes.com

The change lets Moscow keep tight control of its domestic fuel market. Its refineries are also recovering from Ukrainian drone strikes, so it needs room to send more diesel abroad.

Quotas and refinery recovery

The government exempted several refiners from the ban in October and gave them export quotas totaling 0.5 million tons, the sources said. A new government order expected in early November would add more exempt refiners and set new export limits. If the quotas run out quickly, officials could raise them further, the sources told U.S. News, carrying the Reuters report. Shipments under existing intergovernmental agreements will also continue. Russia's Energy Ministry did not respond to a request for comment.usnews.com

On Tuesday, October 27, Deputy Prime Minister Alexander Novak said three tankers carrying Russian diesel to export markets were already under way and a fourth was due to sail on October 28. He also said refineries were recovering quickly from repairs. The sources said refinery utilization was 25% higher at the end of October than at the start of the month, after drone attacks eased off. Russia's nominal diesel output is about 40% above domestic consumption, so refiners will need export outlets to avoid a glut at home.straitstimes.com

The Trump-Putin deal

The arrangement comes from a phone call between Presidents Donald Trump and Vladimir Putin earlier this month. On October 9, Trump said Russia would deliver more than 300,000 tons of diesel right away, then 500,000 tons in November and 1 million tons after that, with the US temporarily lifting sanctions on Russian fuel. The US Treasury issued General License 135, which authorizes transactions involving Russian-origin diesel until April 7, 2027, according to Market Access Map. The license does not lift EU or UK sanctions, and lawmakers from both US parties have questioned whether the arrangement is legal, Energy News reported.usnews.com+2

US diesel prices have climbed above $6.50 a gallon as the wars in Iran and Ukraine squeeze supply, Asharq Al-Awsat reported. Some analysts doubt the deal will add much supply. Sergey Vakulenko wrote for the Carnegie Endowment that without an energy ceasefire with Ukraine, the deal is "largely for show, rather than representing a genuine increase in the volumes of Russian diesel on the global market." Reuters' sources said an energy ceasefire announced alongside the agreement has since allowed Moscow to raise fuel production.carnegieendowment.org+1