Key facts
- Russia's diesel agreement with the U.S. is linked to higher Russian refining and production, according to Deputy Prime Minister Alexander Novak.
- The diesel deal will result in additional taxes for the Russian budget, Novak said.
- Russian Finance Minister Anton Siluanov stated that companies exporting diesel will earn revenue and foreign currency.
- Novak indicated Russia could supply 3 million to 3.5 million tons of diesel monthly to world markets by year-end.
- The U.S. deal involves over 300,000 tons immediately, 500,000 tons in November, and 1 million tons thereafter, according to a post by Trump.
- Russian refinery throughput was at its lowest in over 20 years in July, with three of six largest diesel refineries shut or at quarter capacity after drone strikes.
Russian Deputy Prime Minister Alexander Novak described a diesel agreement with the United States as a "positive signal for our economy," indicating it would boost Russian refining and production and lead to increased tax revenue. Speaking at Russian Energy Week in Moscow, Novak told journalists that the deal would fund social programs and investment opportunities.
Russian Finance Minister Anton Siluanov had previously stated that Russia has no export duties on diesel, and that these exports would be reflected in companies' financial results, thereby contributing taxes to the budget. He added that companies would be able to export diesel, generate revenue, and earn foreign currency, which is beneficial for the balance of payments.
Novak had previously projected that Russia could reach 3 million to 3.5 million tons per month of diesel supplies to global markets by the end of the year, a volume similar to pre-crisis levels. He confirmed on Wednesday that these supplies would reach world markets, including the United States, representing more than 10% of the global market.
A post attributed to Trump outlined immediate U.S. diesel supply volumes of over 300,000 tons, followed by 500,000 tons in November and 1 million tons thereafter.
According to KSE, Russian refinery throughput in July was 3.7 million barrels per day, the lowest in over two decades, against a capacity of approximately 6.5 million barrels per day. A September report indicated that three of Russia's six largest diesel refineries were operating at about a quarter of their capacity or were shut down following Ukrainian drone strikes. This led to diesel exports falling below 1 million tons in June, compared to about 2.5 million tons a month a year prior, or 3.3 million to 3.4 million tons including gasoil, citing trader estimates reported by Reuters.