Russia resumes seaborne diesel exports after partially lifting ban

A Russian state flag flies on the top of a diesel plant in the Yarakta Oil Field, owned by Irkutsk Oil Company (INK), in Irkutsk Region, Russia March 10, 2019. REUTERS/Vasily Fedosenko/File Photo Acquire Licensing Rights

MOSCOW, Oct 9 (Reuters) – Russia, the world’s top seaborne exporter of diesel just ahead of the United States, resumed exports of the fuel on Monday after it lifted its ban on most fuel exports following a decline in domestic wholesale prices.

Russian exports of gasoline and cross-border supplies of diesel by rail and road are still prohibited, Deputy Prime Minister Alexander Novak said on Monday.

On Sept. 21 Russia temporarily banned most exports of gasoline and diesel to cope with a domestic market shortage, with pipeline operator Transneft (TRNF_p.MM) halting diesel shipments from Primorsk from Sept. 22. The ban was partially lifted on Friday.

TASS news agency cited a spokesman for Transneft as saying that the oil pipeline monopoly had restarted diesel exports on Saturday.

Pavel Sorokin, Russia’s first deputy energy minister, told RBC TV that storage at oil refineries had been full, which could lead to a decline in refining volumes.

He also said the ban will be fully lifted once the domestic market is “saturated” with fuel.

“We will take further steps depending on the situation,” he said.

LSEG data showed that one tanker carrying a cargo of diesel left the Russian Baltic port of Primorsk on Monday and three more were docked ready for loading.

All four vessels were chartered in September and had been waiting offshore since the export ban was introduced.

The Chiba, Prime V, Romeos and Eternal Sunshine are each expected to carry about 33,000 metric tons of ultra-low sulphur diesel.

Diesel is Russia’s biggest oil product export, at about 35 million metric tons last year, of which almost three-quarters were shipped via pipeline. Russia also exported 4.8 million tons of gasoline in 2022.

Of that, 3.5 million tons of gasoline and 6.6 million tons of diesel were exported by rail, according to the LSEG data.

Russia has been tackling both shortages and high fuel prices in recent months, which have hurt farmers in particular during the harvesting season.

Since the ban was introduced, wholesale diesel prices on the local exchange have fallen by 21%, while gasoline prices are down 10%.

Reporting by Vladimir Soldatkin and Natalia Chumakova; Editing by Kirsten Donovan and Susan Fenton

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