Russian Diesel Exports: Quota System Expands as Ban Extends

Russia plans to keep its diesel export ban in place until the end of the year while raising monthly shipping limits to four million metric tons. The move is designed to satisfy a new fuel supply agreement with the United States.

Two people familiar with the discussions said the government will allow specific companies to ship fuel under a quota system. This approach balances the need to fulfill commitments to Washington with the domestic need to control oil product flows.

The export ban is currently set to expire on October 31. In October, the government granted export quotas totaling 0.5 million tons to several refiners. A new order expected in early November will expand the list of exempt refiners and set new limits.

Deputy Prime Minister Alexander Novak said on Tuesday that three tankers carrying Russian diesel were already under way to export markets. He added that a fourth vessel would sail on October 28. Novak also stated that Russian refineries were recovering quickly from repairs.

Sources indicated that refinery utilization rose by 25 percent at the end of October compared to the start of the month. This increase followed the subsiding of drone attacks on facilities. The energy ceasefire between Russia and Ukraine, announced alongside the US deal, has allowed Moscow to increase fuel production.

Nominal diesel production in Russia currently exceeds domestic consumption by about 40 percent. As refineries return to normal operating rates, the industry requires export outlets to prevent a domestic surplus. The government may further increase quotas if current limits are used up quickly.

The Energy Ministry did not respond to a request for comment. Shipments under existing intergovernmental agreements will continue alongside the new quota system.