Russia’s oil-product production fell 21.8% year-on-year in June, accelerating from a 13.5% decline in May, as Ukrainian drone strikes crippled refining capacity. About 25% of the country’s refining capacity has been taken offline, Reuters estimates, while up to 40% of diesel-specific capacity is affected, according to Polish media. Kpler estimates refinery throughput dropped in mid-July to its lowest level in 21 years.
Domestic fuel prices are climbing: gasoline rose 1.7% and diesel 1.9% in the week to July 20, bringing year-to-date gains to 18.3% and 20.2%, respectively. Russia imposed a diesel export ban on July 8 and is now considering extending the diesel ban by one month and the gasoline ban by six months beyond their July expiry.
Average Russian diesel and gasoil exports fell to roughly 234,000 barrels per day in early July, down from 400,000 in June. Meanwhile, U.S. diesel inventories have dropped to 97.8 million barrels, 6% below the five-year average.