Russia's diesel and gasoil exports plunged to a multi-year low of just 80,000 barrels per day during the first seven days of August. This drastic reduction, down from 1 million barrels per day last year, is attributed to Moscow's extended restrictions on diesel exports, aimed at mitigating a domestic fuel crisis. This crisis was triggered by a relentless campaign of Ukrainian drone attacks targeting Russian oil refining infrastructure.
The significant drop in Russian diesel supply is further tightening the global market for middle distillates, which was already more constrained than the crude oil market. The International Energy Agency (IEA) reported that global refinery crude throughputs in July were 80.9 million barrels per day, nearly 5 million barrels per day below year-ago levels. The IEA projects that global throughputs will decrease by an average of 2.5 million barrels per day in 2026 before rebounding by 3.5 million barrels per day in 2027. This slump, combined with reduced fuel exports from the Persian Gulf, has led to record-high cracks and margins in Atlantic Basin refined petroleum markets.
Despite a 700,000 barrels per day increase in U.S. fuel exports in July compared to the previous year, global seaborne trade in petroleum products plummeted by 3.8 million barrels per day. This decline is largely due to the sharp drop in diesel and jet fuel exports from both Russia and the Middle East. Russia has been experiencing gasoline and diesel shortages for over three months, as Ukrainian drone strikes have forced numerous large processing sites offline throughout the spring and summer.
