Russia ramps diesel output after US supply deal

Russian refiners have raised diesel production in October toward 180,000 tons per day after the government granted export quotas tied to a fuel supply agreement with the United States and global markets. Diesel output had dropped to about 160,000 tons per day in the first half of October, from 175,000 tons per day in September, before increasing once the new quotas were introduced mid-month.

The government’s move comes while a diesel export ban remains formally in place. From October 1, authorities began allowing exemptions to the ban to issue quotas that enable shipments under the agreement reached between the Kremlin and Washington.

On October 9, US President Donald Trump said Russian President Vladimir Putin had agreed to a deal for Russia to supply diesel to the United States and global markets, with the United States temporarily lifting its sanctions on Russian fuel. Russia confirmed the deal, which opened the way for a sequence of sizeable deliveries.

Under the arrangement, Russia is set to deliver more than 300,000 metric tons of diesel immediately, followed by 500,000 tons in November and 1 million tons after that. A further 3 million tons could be supplied depending on refinery conditions, expanding the potential volume of exports if domestic operations allow.

Industry sources note that domestic diesel consumption in Russia typically falls to about 140,000 tons per day in October, reflecting seasonal factors such as the end of the grains harvest and the summer driving season. With production now rising toward 180,000 tons per day, this demand level would leave at least 40,000 tons per day available for export, or more than 1 million tons per month.

Of this surplus, about 200,000 to 300,000 tons may be needed to supply neighbouring countries under existing arrangements. The remaining volumes can be directed toward markets such as the United States and other global buyers within the framework of the export quotas.

LSEG data showed a Malta-flagged tanker carrying 40,000 tons of Russian diesel bound for New York on October 23. Kremlin spokesman Dmitry Peskov said shipments to the United States would continue on a regular basis after the first tanker departed.

Since the diesel export ban took effect in August, Russian oil companies had reduced production to focus on domestic needs and limited supplies to Central Asian countries under intergovernmental agreements. With quotas now providing controlled access to export markets, industry sources expect the government to keep the ban formally in place while using these quotas to regulate shipments in line with domestic supply and production levels.