Russian oil refineries are increasing diesel fuel production in October after the government granted export quotas under an agreement between the Kremlin and the United States.
This was reported by Reuters, citing two industry sources.
On 9 October, US President Donald Trump said that Russian President Vladimir Putin had agreed to a deal to supply Russian diesel to the United States and global markets. According to Trump, the United States will temporarily lift sanctions on Russian fuel.
Russia confirmed the agreement. Trump said Moscow would immediately deliver more than 300,000 tonnes of diesel, or about 2.25 million barrels. A further 500,000 tonnes are due in November, followed later by another 1 million tonnes. In addition, he said Russia could supply a further 3 million tonnes depending on the condition of its refineries.
According to traders, from 1 October the Russian government allowed exemptions to the existing ban on diesel exports and introduced quotas that make it possible to ship it under the agreement with the Trump administration.
After the diesel export ban took effect in August, Russian oil companies were forced to cut production to match domestic demand, while also limiting supplies to Central Asian countries under intergovernmental agreements.
According to Reuters sources, in the first half of October diesel production in Russia fell to about 160,000 tonnes a day from 175,000 tonnes in September. After new export quotas were introduced in mid-month, volumes began to rise—to around 180,000 tonnes a day.
At the same time, domestic diesel consumption in October typically falls to about 140,000 tonnes a day. This is due to seasonal factors, including the end of the grain harvest and the summer driving season.
As a result, at least 40,000 tonnes of diesel a day could be available for export, or more than 1 million tonnes a month. Of that volume, neighbouring countries may require between 200,000 and 300,000 tonnes, the sources said.
The agency’s sources expect the Russian government to keep the export ban in place, using quotas to regulate supplies and control the situation on the domestic market.
According to LSEG, on 23 October ship-tracking systems recorded a Malta-flagged tanker carrying 40,000 tonnes of Russian diesel fuel to New York.
That same day, Kremlin spokesman Dmitry Peskov said supplies of Russian diesel to the United States would continue on a regular basis after the first tanker was dispatched.