Russia’s decision to ban diesel exports has deepened a global supply crunch, pushing fuel prices higher as markets face tighter availability from reduced refinery output, strong demand and rising geopolitical risks.
According to Reuters, the impact has spread beyond countries that previously relied on Russian supplies. Although the United States and Europe no longer import Russian fuel due to sanctions linked to the Ukraine war, prices in both regions have climbed as global markets adjust to the loss of a major exporter.
US ultra-low sulphur diesel futures jumped 11 per cent to US$154 a barrel on Wednesday. In Europe, low-sulphur gasoil futures reached a record premium of US$60.77 a barrel over Brent crude.
Russia is the world’s second-largest diesel exporter after the United States. Its shipments had already declined before the ban due to domestic shortages caused by refinery disruptions linked to Ukrainian drone attacks. Russian diesel and gasoil exports fell to 234,000 barrels per day between July 1 and 10, compared with an average of about 817,000 barrels per day in 2025.
The global diesel market was already under pressure before the latest move. Demand rebounded after the COVID-19 pandemic, while refinery closures in the West reduced available supply. Renewed tensions in the Middle East have added further uncertainty, particularly over shipping routes through the Strait of Hormuz.
US diesel inventories also showed signs of strain, falling by more than 4.5 million barrels in the latest week to 97.8 million barrels, about 6 per cent below the five-year average.
The loss of Russian exports is expected to intensify competition for alternative supplies. Countries such as Brazil and Turkey may compete with European buyers for US cargoes, raising costs for industries that depend on diesel, including transport, agriculture and power generation.
