Russia extended its ban on diesel exports until September 30, 2026, according to a government statement, aiming to stabilize the domestic fuel market. This decision comes as Ukraine continues to intensify attacks on Russian refineries, leading to significant drops in fuel production. By late August 2026, only five out of Russia's major refineries had not been hit by Ukrainian drones, impacting output significantly.
Ukrainian drone strikes have severely affected Russian refinery throughput, which fell to approximately 3.8 million barrels a day in June, the lowest in over two decades, and nearly 30% below the previous year's levels. Gasoline output was down about 20% compared to 2025, and diesel production decreased by almost 30%. These domestic shortages prompted Moscow to impose and extend export restrictions, initially a partial ban for non-producers and later a full ban encompassing all producers of petroleum products.
The export ban, while intended to alleviate domestic shortages and price pressures—gasoline prices rose over 19% and diesel prices approximately 18% by August 26, 2026—has coincided with a tight global diesel market. This tightness is also influenced by serious disruptions in the Middle East, such as those in the Strait of Hormuz. The decline in Russian diesel exports has exacerbated this situation, contributing to record diesel prices globally, with U.S. retail diesel exceeding $6 a gallon and European diesel futures more than doubling since the start of the year.
Despite the challenges in refined products, Russia's oil industry has shown resilience. Damaged refinery units are repaired, and crude that cannot be processed domestically can be redirected to export markets, cushioning some financial damage. This allows Russia to maintain crude exports while grappling with refined product shortages, managing domestic supply by importing fuel and adjusting regulations to ease market pressure. However, the costs associated with repeated repairs, export restrictions, and domestic market interventions are substantial and are impacting Russia's overall oil revenue.
