Ukraine's strikes on refining infrastructure deep inside Russia have had a profound economic impact on the world's third-largest refiner after China and the U.S.
Refinery crude processing runs fell to 8.7 million bpd in June, down 3.8 million bpd, or 30%, from a year earlier, hitting the lowest level since May 2004, according to the IEA. Gasoline output in Russia has also dropped by around a fifth, causing severe shortages in some regions that have forced Moscow to import fuel. Russia has banned gasoline exports since April and diesel exports since July, with the latter restriction set to stay in place until September 30.
The diesel export ban has had a significant market impact. Russia was the world's second-largest diesel exporter after the United States last year, shipping more than 800,000 bpd, or roughly 12% of global seaborne diesel exports, according to Kpler. Benchmark diesel prices LGOc1 have risen by 60% since the ban was put in place.
A Ukrainian agreement to halt strikes on Russian energy facilities therefore appears significant at first glance, but it should be treated with a heavy dose of scepticism.
This is not the first energy infrastructure ceasefire agreed to by Russia and Ukraine since Moscow launched its full-scale invasion in February 2022. In March 2025, Trump brokered a mutual suspension of strikes on energy facilities. Both sides accused the other of violating the arrangement almost immediately, and the deal never truly materialised.
Moscow has yet to comment on Trump's latest announcement, while Kyiv has said it wants more details. Whether this purported agreement, if implemented, proves more durable remains to be seen.
But even if attacks on Russian refineries do cease, this is unlikely to materially improve the country's diesel production and export outlook in the coming months.
Many Russian facilities have been struck multiple times, including Gazpromneft's SIBN.MM Moscow refinery and Rosneft's ROSN.MM Ryazan refinery, so the accumulated damage is likely to be extensive.
Reports suggest the Ukrainian attacks often hit crude distillation units – the core processing units that sit at the heart of every refinery – as well as hydrocrackers, highly complex and costly installations that are essential for producing diesel.
Sourcing replacement equipment, or even temporary repair solutions, will be challenging for Russian refiners as Western sanctions continue to restrict access to specialised technology and components. Russian operators will also find themselves competing for limited engineering resources and equipment given the extensive damage to facilities across the Middle East.
Even if Russia succeeds in sourcing the necessary parts, repairs are likely to take months. That means any meaningful recovery in Russian fuel exports, and any resulting relief for global diesel markets, is unlikely before next year under even the most optimistic scenario.
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