Russia's Finance Ministry expects damper for diesel imports to cease functioning following partial ban on diesel exports - deputy finance minister
DUSHANBE. Oct 20 (Interfax) - Russia's Finance Ministry expects the damper mechanism for imported diesel fuel to cease to apply following the partial lifting of the export ban on the fuel, State Secretary and Deputy Finance Minister Alexei Sazanov told reporters.
"We hope so," he said in response to whether the damper for imported fuel would cease functioning once the export ban has been partially lifted.
Under current legislation, the damper for imported diesel fuel is triggered if a ban on the export of diesel fuel, kerosene, and middle distillates was in effect in Russia during the preceding month.
On October 9, U.S. President Donald Trump had a phone conversation with Russian President Vladimir Putin, during which the parties addressed Russian supplies of diesel fuel to the United States and international markets. The United States Treasury Department's Office of Foreign Assets Control (OFAC), acting on instructions from Trump, promptly issued a temporary general license authorizing the supply of Russian diesel fuel to the global market following the call. The next day, the Russian government announced that the ban on diesel fuel exports from Russia had been partially lifted.
"This decision was reached in accordance with agreements reached between Russian President Vladimir Putin and U.S. President Donald Trump. It takes effect on October 10 and will allow for the shipment of 500,000 tonnes of diesel fuel to the global market at this stage," according to the statement.
As noted, oil companies will begin contracting diesel fuel supplies with foreign counterparties, subject to approval by the Russian government.
Meanwhile, Deputy Prime Minister Alexander Novak said that the decision would not negatively affect the interests of Russian consumers.
"Diesel fuel in Russia is produced from Russian crude oil at domestic refineries. Production volumes are sufficient to fully meet domestic demand while also allowing for the export of the specified quantities to the global market," Novak said in the statement.
As reported, Russia currently has an export ban in place for diesel fuel that is in effect until October 31, 2026, for producers, and until January 31, 2027, for non-producers. Additionally, a ban on the export of jet fuel is in place until November 30. Furthermore, a total ban on gasoline exports is in effect until January 31, 2027.
The country's fuel market begins to shift from summer diesel to winter diesel in early autumn. The first weeks of September showed that demand for summer diesel began to decline, but a full transition to frost-resistant fuel takes time. As a rule, winter diesel becomes dominant in the diesel segment in October-November.
Historically, Russian oil refining produces insufficient amounts of winter diesel. During the warm period, few refineries produce winter diesel; over the summer, all of this product is purchased for the supply to the north.
In the case of refinery-produced winter diesel, the risk of unscheduled refinery repairs has also been added in recent years - untimely completion of repairs at refineries or the emergence of logistics problems cannot be ruled out.
Refinery-produced frost-resistant diesel accounts for approximately 80%-90% of consumption of this product. The remaining amounts are usually covered by the production of winter diesel through the blending of summer/inter-season diesel and aviation kerosene - the so-called surrogate. This type of product provides substantial support to the frost-resistant diesel market in the winter period.
Also among the factors influencing the country's diesel market in the winter period is an attractive export alternative amid a tense situation with supplies of petroleum products on world markets.
