Russia ends ban on diesel exports to sea ports

Oct. 6 (UPI) -- Russia ended a diesel export ban Friday weeks after the government ordered energy companies to halt all fuel exports indefinitely in a bid to combat domestic shortages.

The decision to allow diesel piped to sea port terminals to be exported was on the condition that supplier companies reserve at least half of the diesel they produce for the domestic market, the Kremlin said.

European diesel prices fell Friday morning with the ICE gas oil futures contract in London falling almost 3% to $836.75, although it later recovered and was down just 0.7% at 11 a.m. GMT.

However, the Sept. 21 ban, which sent prices on international markets rocketing, remains in place for gasoline with resellers of petroleum products being slapped with a new $495.60 per ton "protective duty" to deter so-called "grey exports and forward selling.

The government said it was "suppressing attempts by resellers to purchase fuel in advance for subsequent export after the current restrictions are lifted" or exporting fuel disguised as a different product.

The export ban was brought following scenes of Russians forced to wait in line for gas in the world's third-largest producer and refiner of oil products.

Moscow said the restrictions would help saturate the fuel market which would, in turn, "reduce prices for consumers" and prevent companies from starving the price-controlled domestic market by redirecting supplies abroad to take advantage of current high prices internationally.

India and Turkey have been aiding Russia to skirt sanctions to get its oil to global markets by importing ever larger volumes of Russian crude oil before refining it into fuel which is being legally sold to Europe and Britain via the international market, despite bans on the import of Russian due and a price cap on its oil exports.

In December, the G7+ group of countries imposed a $60 price cap on sea exports of Russian oil in retaliation for attacking Ukraine, with countries that pay more subject to losing access to insurance and financial services vital for shipping oil via international waters.

The supply cut has seen oil prices on the rise over the summer, spiking above $94 last week before easing back. As of 7.40 a.m. EDT, Brent Crude was trading at $84.07 while West Texas Intermediate was at $82.33, although both remain more than 10% up on August.