Russia Raises Diesel Export Quotas to 2 Million Tonnes in November as Ban Extended Through End-2026
Key Facts
Russia plans to extend its diesel export ban through the end of 2026 while allowing some companies to export under a quota system, according to two sources familiar with the matter cited by Reuters on October 29. The arrangement allows Moscow to maintain restrictions while meeting a new commitment to supply fuel to the United States. The sources said quotas would rise in November to 2 million metric tonnes, equivalent to about 500,000 barrels per day, compared with 500,000 tonnes granted to several refineries in October. A new government order is expected in early November, expanding the list of exempt refineries and setting new export limits. This means the volumes that can be shipped will remain tied to official exemptions and the limits set by the forthcoming order.
The new proposal differs from existing restrictions on diesel exports by company category. On September 30, the government extended a ban on exports of diesel, marine fuel and gasoil by producers through October 31, while the ban on diesel exports by non-producers remained in force until January 31, 2027. When extending the restrictions in September, the government said its aim was to maintain stability in the domestic fuel market, including during a seasonal increase in demand for motor fuel at harvest time. Reuters, meanwhile, linked the planned extension through year-end to the US supply commitment and did not attribute it to the government’s earlier stated rationale. On October 10, the government allowed 500,000 tonnes of diesel to be shipped to the global market in the first phase, with oil companies to begin contracting with foreign counterparties after government approval.
The planned increase in November quotas follows a recovery in Russian refinery operations during the month. Two sources told Reuters that the refinery operating rate rose 25% in late October compared with the start of the month, following a decline in drone attacks on facilities. Russia’s nominal diesel output exceeds domestic consumption by about 40%, according to Reuters. The agency said a return to normal operating rates at refineries requires finding export outlets to avoid a domestic market surplus. Alongside the quota system, Deputy Prime Minister Alexander Novak said production was sufficient to meet all domestic demand and allowed the specified volumes to be exported to the global market.
The export outlook is also linked to temporary US arrangements. On October 9, Presidents Donald Trump and Vladimir Putin discussed Russian diesel supplies to the United States and international markets during a phone call, Interfax reported. After the call, the US Treasury issued a temporary license allowing Russian diesel supplies to the global market. The Associated Press said the license prevents sanctions from being applied until April 2027 to Russian diesel cargoes that had been loaded onto tankers by the day of the announcement. Novak estimated that Russia could supply 300,000 tonnes to the United States and other partners in October, with the volume potentially rising to 500,000 tonnes in November and 1 million tonnes in December; he added that supplies could reach 3 million tonnes a month in the medium term.
The supply announcement was preceded by a move in the Russian market; Interfax reported that the Moscow Exchange index rose above 2400 points in evening trading, while Rosneft shares gained 9%, Lukoil rose 6% and Gazprom Neft advanced 5%. In the US fuel market, heating oil futures settled at $4.6633 per gallon on October 30, compared with $4.5875 the previous day. Russia’s Finance Ministry said the subsidy mechanism for imported diesel fuel is activated if a ban on exports of diesel, kerosene and middle distillates was in force during the previous month. Deputy Finance Minister Alexei Sazanov said the ministry hoped the subsidy mechanism would stop after the partial lifting of the ban. Markets are awaiting the government order expected in early November to identify exempt refineries and their export limits.