Diesel fuel (DF) is the main commodity in our export basket of petroleum products, with Brazil being one of the largest importers. Only Turkey and China import more than Brazil. One of the reasons cited for the decline in exports to this country is the ban on DF exports from Russia to non-producers, which was imposed in October this year. This theory is somewhat supported by external data from the Finnish Center for Research on Energy and Clean Air (CREA), which reports a decline in petroleum product exports from Russia since September this year. According to CREA, November exports of Russian DF to Turkey (the largest importer) decreased by 27%. Nevertheless, while statistics are a stubborn thing, their perception is heavily influenced by interpretation. The simplest explanation is not always the correct one.
Most likely, the main factors behind the decline in exports were not the bans on DF shipments abroad for traders, but a decrease in crude oil refining volumes in Russia due to drone strikes on refineries, the necessity to meet internal fuel market demands, and the tightening of sanctions from the US and EU.
Russia’s demand for petroleum products is below the capabilities of our refining system, particularly for DF, notes Yuri Stankevich, Deputy Chairman of the State Duma’s Energy Committee. The production volumes of DF are almost twice as high as domestic demand. Furthermore, the technological processes at refineries do not allow for significant changes in the product basket structure (gasoline, diesel fuel, kerosene). Consequently, our companies are forced to seek out markets, choosing the most optimal options while taking into account sanction limitations, logistical costs, demand dynamics across various continents, and the prices offered by importing countries.
Exporting DF over long distances, such as to Brazil, is not particularly profitable during unfavorable market conditions, and for non-producer traders, it is doubly unprofitable since they resell the product, explains Dmitry Gusev, Deputy Chairman of the Supervisory Board of the "Reliable Partner" association and member of the expert council of the "Gas Stations of Russia" competition. Such shipments may only be of interest to large domestic oil companies, which face no outright prohibitions.
According to Sergey Tereshkin, CEO of Open Oil Market, DF shipments to Brazil from Russia have been showing a decrease since early 2025. The dynamics of these shipments are influenced by increased US attention to the South American region this year. For Brazil, the risks of breaching sanctions against major Russian oil companies have increased.
In his opinion, the future dynamics of shipments will heavily depend on the geopolitical backdrop. A sharp reduction in DF exports to Brazil is unlikely to occur due to the mentioned absence of a direct prohibition on export, although fluctuations in volumes are possible.
A similar view is held by Sergey Frolov, Managing Partner at NEFT Research. Russian DF is in demand on the global market, and additional volumes will find their market niche after all restrictions are lifted. However, shipments to the domestic market remain a clear priority, he emphasizes.
Although diesel prices on the domestic market have decreased in the exchange from October's peaks, retail prices are still rising. The rate of increase has slowed, but as of early winter, diesel had increased by 1.1% by December 15, according to Rosstat. Most likely, the partial export ban on DF will only be lifted when the price rise halts. Conversely, gasoline prices are currently decreasing both in wholesale and retail markets, but the volumes exported remain relatively low (with a maximum of 15% of production).
Regarding Turkey, this country is currently facing at least as much, if not more, pressure from the European Union and the US as Brazil is. It is often referred to as a "laundromat" for Russian raw materials. It is no coincidence that after the introduction of the latest US sanctions against our largest oil companies, Turkey sharply reduced its purchases of not only petroleum products but also crude oil from Russia. The situation is exacerbated by drone attacks on tankers in the Black Sea, creating a high risk of cargo loss.
As a result, we are currently more reliant on crude oil exports, although all experts agree that supplying petroleum products is more economically advantageous. As Stankevich notes, added value is generated at the stage of raw material refinement.
However, while our refining capacities are barely increasing and new refineries are not being built, Gusev laments. This requires significant long-term investments, which are unlikely under the current monetary and fiscal policies, leading us to export crude oil, the expert explains.
Source: RG.RU
