Russia's diesel export ban deepens global supply crunch

The U.S. and Europe no longer import fuel from Russia, due to its invasion of Ukraine, but Moscow's export ban nevertheless sent prices for diesel surging in both regions, highlighting the globally interconnected nature of oil markets. U.S. ultra-low sulphur diesel futures HOc1 surged 11% on Wednesday to $154 a barrel, or an $80 per barrel premium to WTI crude. CLc1 European low-sulphur gasoil futures, meanwhile, hit an all-time high premium to Brent crude futures of $60.77 a barrel on Wednesday. Russia's decision to ban diesel exports this week has roiled global energy markets, exacerbating shortages of the industrial fuel and sending prices soaring, even in countries that no longer buy the fuel from Moscow. Diesel accounts for the largest share of global oil consumption, and soaring prices can ripple through the global economy given its wide range of uses, from industrial machinery and farm equipment to heavy transport and electricity generation. Supply has remained tight for years due to strong post-pandemic demand and output reductions that accompanied refinery closures in the West. The Iran war has further strained the market. Russia is the world's second-largest diesel exporter after the U.S., and refinery outages there can significantly affect global supplies of fuels. Its exports were already slowing prior to the ban due to domestic shortages left by Ukrainian drone attacks. Diesel and gasoil loadings from Russia were just 234,000 barrels per day from July 1 to 10, according to Kpler, down from 400,000 bpd in June and the 2025 average around 817,000 bpd. A loss of Russian exports leaves less supply available globally, forcing regular customers such as Brazil and Turkey to compete with European nations and other importers for U.S. cargoes. This could create knock-on effects for power and agriculture sectors. If Turkey kept its own production to itself for domestic use, that would cut off a source of diesel used to generate power in the Mediterranean during the summer peak in demand, Vortexa analyst Mick Strautmann said. The rise in diesel prices also means that farmers' costs could rise ahead of the Southern Hemisphere's planting season and the Northern Hemisphere's harvest, with Brazilian and U.S. Midwestern farmers competing for the same supplies. "The U.S. became the go-to diesel supplier for the EU/Great Britain when the Strait of Hormuz was disrupted, but every barrel it now redirects to Latin America is a barrel not going to Europe," said Qilin Tam, consultancy FGE NexantECA's head of refining. "And it's happening with U.S. and ARA diesel inventories already well below the historical range for this time of year." Renewed tensions in the Middle East also mean that China's relaxation of fuel export bans in July is not guaranteed to continue into August, curbing potential relief from Asia, Tam added.

Russia's diesel export ban deepens global supply crunch

U.S. and European prices surge

Russia's export ban tightens diesel markets

Competition for cargoes widens beyond Europe

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