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The Russian government lifts the ban on the export of most of its diesel fuel

by Patria

Russia’s government said on Friday it had lifted a ban on the export of diesel fuel delivered to seaports by pipeline, removing a large part of the restrictions imposed last month.

The Kremlin said in a statement that it had “lifted restrictions on the export of diesel fuel delivered to sea ports by pipeline, provided that the producer delivers at least 50% of the diesel fuel produced to the domestic market,” according to a Google translation.

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The announcement comes shortly after Russia imposed an indefinite ban on diesel and gasoline exports to most countries, sending shockwaves through global markets. Restrictions on gasoline exports remain in place for now.

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Moscow initially implemented the measures on Sept. 21 to help stabilize domestic fuel prices, with Kremlin spokesman Dmitry Peskov saying last month that the restrictions would remain in place “as long as needed to ensure market stability,” according to Reuters.

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The ban led to a spike in diesel prices, as Russia is one of the world’s largest suppliers of diesel and a major exporter of crude oil.

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As part of Friday’s announcement, the Russian government also said it had imposed a so-called “protective duty” of 50,000 rubles ($495.6) per ton on resellers of petroleum products. The duty is intended to prevent possible “gray exports” – companies operating through unauthorized channels.

“In this way, the government is suppressing attempts by resellers to buy fuel in advance for subsequent export after the current restrictions are lifted. This also prevents them from exporting class fuel under the guise of other products,” the Kremlin added.

Diesel prices in Europe fell on the news. The ICE gasoil contract in London, a proxy for diesel prices, traded 2.2% lower at $849.75 a ton in morning trading.

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