Russia resumes seaborne diesel exports after ban lifted

Russia resumed overseas diesel shipments over the weekend after the government lifted an unprecedented ban that roiled global markets for the fuel. 

Transneft PJSC, Russia’s crude and product pipeline operator, restarted loading of oil products on Saturday, based on requests from producers that were confirmed by the energy ministry and cleared by customs, said spokesman Igor Dyomin.

Moscow allowed seaborne diesel exports to resume on Oct. 6, just over two weeks after it imposed the ban to rein in surging domestic prices for automotive fuel. The return of flows provides relief to an oil market already tightened by Saudi Arabia and Russia’s curbs on supplies of crude that is rich in diesel. 

At least two tankers hauling ultra-low sulfur diesel have sailed from the Baltic port of Primorsk since Russia lifted the ban, according to ship-tracking data and port reports compiled by Bloomberg. The Eternal Sunshine departed on Sunday with about 318,000 barrels, and the Romeos sailed early Monday with 287,000 barrels, according to the data, which incorporates information from analytics firm Kpler Ltd.

No departures were observed over the weekend from the Black Sea port of Novorossiysk. However, the Beks Lina started loading diesel there on Oct. 7.

While Russia has lifted the ban on seaborne flows, some limitations are still in place under new rules. Exports must be delivered to Russian ports by pipeline, and producers are required to keep at least 50% of their diesel output at home. 

In addition, Russia has imposed a diesel-export quota on fuel producers, which in October shouldn’t exceed their average overseas shipments in the past eight months, Interfax reported on Monday, citing First Deputy Energy Minister Pavel Sorokin.

Diesel supplies via railways remain banned, in an effort to replenish the domestic market and to prevent an increase in wholesale prices, Deputy Prime Minister Alexander Novak said at a government meeting on Monday.