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Russia Temporarily Bans Diesel Exports, Prices Jump

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Russia temporarily banned exports of diesel in a bid to stabilize domestic supplies, driving European prices higher in already tight global fuel markets.

So far this year, Russia was the world’s single biggest seaborne exporter of diesel-type fuel, narrowly ahead of the US, according to Vortexa data.

The country shipped more than 1 million barrels a day during January to mid-September, with Turkey, Brazil and Saudi Arabia being among the main destinations.

The ban, which also applies to gasoline, comes into force on Sept. 21, and doesn’t have a final date, according to the government decree.

Diesel prices in Europe jumped on concern the measure will aggravate global shortages.

Analysts say the world’s oil refiners are struggling to produce enough of the fuel amid curbed crude supplies from Russia and Saudi Arabia, the biggest producers within the Organization of Petroleum Exporting Countries and its allies.

“Temporary restrictions will help saturate the fuel market, that in turn will reduce prices for consumers” in Russia, the government’s press office said on its website.

There are exemptions for minor supplies, including deliveries to trade alliance partners from some former Soviet republics, as well as intergovernmental agreements, humanitarian aid and transit, the decree said.

Under the decree, fuel cargoes already accepted for shipment by Russian Railways or those with loading papers for seaborne transportation can still be exported.

The ban includes all types of diesel, including summer, winter and Arctic blends, as well as heavy distillates including gasoils, according to the decree.

Last year, Russia’s seaborne exports of diesel-type fuel were about 0.95 million barrels a day, according to Vortexa data. That was about 3.4% of total global demand.

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