September 18, 2023 [Oil Price]- Russia is again reviving the possibility that it could ban all crude oil product exports in order to stabilize volatile fuel prices in the country, according to Russia’s TASS new agency said on Friday.
Alternatively, Russia could increase its oil product exports duty to $250 per tonne. This duty will be refunded for those companies that meet their quota for supplying fuel to Russia’s domestic market.
A ban on product exports out of Russia—although temporary—would squeeze Europe’s diesel supplies even more. While Europe has banned the importation of Russian-sourced refined products as of February, it merely shifted trade patterns, with Russia increasing its refined products exports by 50% year over year as of the first quarter by increasing shipments to Africa.
The news comes even as Gazprom’s Astrakhan gas processing plant resumed gasoline output after maintenance work. Russian Energy Minister Nikolai Shulginov said earlier this week that there were a number of oil refineries that were due to be brought back online after maintenance work—Astrakhan being just one. The end of maintenance work on the refineries could go a long way in easing Russia’s domestic fuel crunch, and could negate the need for a ban on the country’s exports.
Russia has been considering a fuel export ban since May in an effort to avert domestic fuel shortages and rein in prices after announcing a halving of subsidies to oil refiners that will start this month in order to keep more money in government coffers to fund its military operation in Ukraine.
Despite the domestic fuel crunch, Russia’s oil refineries increased crude processing rates in the first half of last month in the runup to the subsidy cuts.
Russia also said it planned to reduce diesel exports from western ports by a quarter this month as seasonal refinery maintenance continued.
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