Russia Extends Diesel Export Ban Through January 2027 as Goldman Sachs Reports 35% Drop in Global Diesel Supply

Russia announced on Thursday it is extending its diesel and gasoline export bans through January 31, 2027, reversing signals from just five days earlier that the diesel ban would end once domestic markets stabilized. The original restrictions took effect July 8 after Ukrainian drone attacks damaged refineries and sent domestic fuel prices higher. Diesel, gasoline, marine fuel, and gas oils all fall within the extended order.

What the Extended Order Covers

Starting September 1, Russian producers will be permitted to export diesel, marine fuel, and gas oils. Other commercial exporters operating in the Russian market remain restricted for the full ban period. Gasoline exports face restrictions through January 31, 2027, with no September carve-out for any party. The government has also established separate procedures through November 1 to guarantee diesel and gasoline supplies for farmers during the harvest season.

Goldman Sachs: 35% Drop in Global Diesel Exports

Goldman Sachs reported that global diesel exports fell approximately 35% in July, a decline of about 2.6 million barrels per day. Working backwards from that 35% figure, pre-shock global diesel export volumes ran at roughly 7.4 million barrels per day, meaning Russia's ban and Middle East disruptions together removed more than a third of world diesel trade in a single month. IEA executive director Fatih Birol confirmed the severity of the shortfall, stating that "markets for refined oil products, including diesel and gasoline, are considerably tighter than those for crude." Global refining throughput dropped by as much as 6.5 million barrels per day compared to July 2025, pushing inventories below seasonal averages and refining margins to record highs.

Why Record U.S. Refinery Output Cannot Fill the Gap

U.S. refineries produced an average of 17 million barrels of fuels per week recently, the highest output since September 2019, driven by crack spreads that hit $70 per barrel in July. At a crack spread of $70 over Thursday's WTI settlement of $83.68 per barrel, the implied diesel value is $153.68 per barrel. The 2.6-million-barrel daily shortfall therefore represents $399.6 million per day in lost refined fuel supply, or $146 billion on an annualized basis. Despite record domestic production, U.S. refiners cannot offset the combined weight of Russian export restrictions, Middle East disruptions, permanent European refinery closures, and Chinese government export quotas tightening global supply simultaneously.

Winter Stockpiling Season Tightens the Outlook

Winter stockpiling for heating oil and diesel typically begins in August across the Northern Hemisphere, adding seasonal demand on top of already thin inventories. Developing nations in Southeast Asia, Africa, and Latin America face the sharpest price pressure from a prolonged shortfall, given limited domestic refining capacity and dollar-denominated import costs. The ban extension through January 31 covers the entire winter demand peak, leaving no buffer for inventory rebuilds before spring. A previous Oil Authority report detailed how the Houthi strike on Saudi Arabia's Jazan refinery removed additional refining capacity from the Middle East, compounding the shortfall Russia's ban created.