Key facts
- Russia's diesel and gasoil exports dropped to 80,000 barrels per day in early August, a multi-year low.
- Ukrainian drone attacks on Russian refineries and Moscow's export restrictions are contributing to the decline.
- Global refinery crude throughputs remain significantly below year-ago levels.
- U.S. diesel prices are nearing the record high set in June 2022.
- Tightening supply from the Middle East and Russia, alongside harvest-season demand, is driving up middle distillate cracks.
Russia's diesel and gasoil exports have plummeted to a multi-year low of 80,000 barrels per day in the first week of August, significantly below the 1 million barrels per day shipped last year. This sharp decline is attributed to Ukraine's persistent drone campaign targeting Russian oil refining infrastructure and Moscow's extended export restrictions, which have disrupted supply for over three months.
Globally, refinery crude throughputs in July increased but remained nearly 5 million barrels per day below year-ago levels, totaling 80.9 million bpd, according to the International Energy Agency (IEA). The IEA also noted that tighter light and middle distillate markets have boosted refining margins to record highs in the Atlantic Basin. Global seaborne trade in petroleum products has seen a significant drop, largely due to decreased diesel and jet fuel exports from Russia and the Middle East.
The U.S. national average diesel price hit $5.7832 per gallon on Thursday, just three cents shy of the record set in mid-June 2022. GasBuddy's head of petroleum analysis, Patrick De Haan, stated that the record could fall by Labor Day, with Gulf Coast spot prices already hitting new highs. He described the market as "short- buyers bidding up every drop like a housing market with too few homes."
The persistent global diesel supply crunch is expected to continue through the winter, driven by insufficient refining capacity and geopolitical factors impacting supply routes. This situation has led to record-high diesel prices in the United States and is prompting governments to consider relief measures.