2026-08-04
Attacks on Refining Facilities Force Russia to Extend Fuel Export Restrictions, Leaving the Crude Oil Giant with a Refined Product Shortage
Russia possesses abundant crude oil supplies, yet it experienced gasoline and diesel shortages in the summer of 2026. Data from the U.S. Energy Information Administration (EIA) show that Russia produced approximately 9.9 million barrels per day of crude oil and lease condensate in 2025, ranking second globally behind the United States. However, continued Ukrainian attacks on Russian refineries, oil depots, and transportation facilities have disrupted part of the country’s crude oil processing capacity, making it difficult to convert crude oil into the gasoline, diesel, and jet fuel needed by the domestic market.
The Russian government therefore announced on July 30 that exports of gasoline, diesel, marine fuel, and diesel-related products would be suspended from August 1 through January 31, 2027. However, beginning September 1, diesel, marine fuel, and diesel-related products exported by direct producers will no longer be subject to the restrictions, while intergovernmental agreements and humanitarian aid will also be exempted. This means that August will be the strictest phase of the export controls, while subsequent diesel supply will continue to be adjusted according to domestic market conditions and the pace of refinery restarts.
Damage to Refining Capacity Prevents Crude Oil Supply from Being Converted into End-Use Fuels
Crude oil must undergo distillation, cracking, desulfurization, and blending before it can be turned into gasoline and diesel. Once critical refinery equipment is damaged, the domestic market may still lack directly usable fuel even if oil fields continue producing. Ukraine expanded its drone attacks from the spring onward, forcing several large Russian refineries to shut down. In early July, gasoline production at one point was sufficient to cover only approximately 65% of normal summer demand, prompting some regions to impose purchase limits and resulting in queues at gas stations.
Diesel exports also contracted rapidly. Russia’s exports of diesel and diesel-related products averaged approximately 817,000 barrels per day in 2025, but fell to around 234,000 barrels per day in early July 2026. At the same time, crude oil that could not be processed domestically was redirected to overseas markets. The latest market estimates indicate that Russia’s crude oil exports from western ports may rise by 4% in August from July to approximately 2.7 million barrels per day, reflecting how lower refinery throughput is changing the country’s export structure.
Export Restrictions and Fuel Imports Proceed in Parallel, Showing That Supply Has Not Fully Recovered
To increase domestic supply, Russia has not only restricted exports but has also unusually begun importing gasoline. Russia has imported fuel by sea from India and Morocco, while also increasing gasoline shipments by rail from Belarus and Kazakhstan. Approximately 30,000 metric tons of Moroccan gasoline arrived in Murmansk at the end of July, mainly to fill short-term shortages in specific regions and fuel categories.
These imports remain insufficient to replace Russia’s large domestic refining capacity. Shipping distance, port transshipment, fuel specifications, and the limited surplus supply of neighboring countries all constrain import volumes. The Russian government has also established temporary fuel supply arrangements for the agricultural sector to ensure fuel availability for farm machinery and transportation during the autumn harvest season, indicating that the authorities remain concerned about regional shortages and price volatility.
Declining Russian Exports Intensify Competition for Global Refined Product Supplies
As Russia reduces refined product exports, some refineries in the Middle East have yet to fully recover, while refinery runs in Asia also remain low. The IEA’s July report showed that although global refinery throughput increased by 1.5 million barrels per day in June from the previous month, it was still 6 million barrels per day lower than a year earlier. Crude oil supply has recovered faster than refining activity and refined product supply, causing supply-demand conditions and price trends for crude oil to diverge from those of refined products such as gasoline and diesel. Changes in the international crude oil market can be referenced through “New York Mercantile Exchange: Energy Futures - Brent Crude Oil,” but crude oil futures prices do not fully reflect supply pressure in refined product markets.
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As of July 30, the European diesel crack spread had at one point risen to a record high of USD 74.66 per barrel, while jet fuel refining margins also exceeded USD 80 per barrel. Russia’s traditional buyers, including Turkey and Brazil, therefore needed to turn to the United States, India, and other refining centers for supplies, further intensifying competition for cargoes across different regions.
Although the United States has become an important alternative supplier, its additional supply capacity is also approaching its limit. “New York Mercantile Exchange: Energy Futures - West Texas Intermediate Crude Oil” reflects price changes in the U.S. crude oil market, but whether the United States can increase gasoline and diesel supply still depends on refining capacity and refined product inventories. EIA data show that U.S. crude oil and petroleum product exports reached a record high of 13.6 million barrels per day in April. During the week ending July 24, U.S. crude oil inputs to refineries averaged 17.336 million barrels per day, with the utilization rate reaching 97.2%. Distillate fuel oil inventories increased by 1.1 million barrels from the previous week to 110.6 million barrels, but remained approximately 10% below the five-year average for the same period. With facilities operating close to full capacity, the room for a substantial short-term increase in refined product output is relatively limited.
Shortages May Ease Partially, but Refined Product Price Risks Remain Elevated
As some refineries resume production, pressure on domestic supply in Russia is expected to ease gradually. Allowing direct producers to resume some diesel exports from September will also help prevent refiners from cutting throughput because of inventory accumulation once supply conditions improve. However, if major refineries, pipelines, or export terminals are attacked again, Russia may once more tighten restrictions.
The Russian case highlights the gap between crude oil supply and refined product availability. Increasing crude oil exports cannot immediately fill shortages of diesel and gasoline because other markets are also constrained by refining capacity, fuel specifications, and logistical conditions. The Northern Hemisphere is about to enter the agricultural harvest and freight peak season. If diesel prices remain elevated, costs will gradually be transmitted to agriculture, road transportation, industrial production, and merchandise distribution. The key factors over the coming months will be the pace of Russian refinery restarts, the actual scale of export exemptions from September, and whether refining centers in the United States, India, and the Middle East can provide more alternative supply.