MOSCOW, October 6. /TASS/. Diesel fuel exports, following the Russian government’s decision for their partial resumption, will be about 1.4-1.5 mln metric tons in October, or two times less than the norm for Russia, Sergey Kondratyev, sector head at the Institute of Energy and Finance, told TASS.
The partial lifting of the diesel fuel export ban will lower pressure on producers, the expert said. "Supplies over the Transneft system in October may be up to 1.4-1.5 mln metric tons (two times less than before the ban)," he noted.
The partial removal of constraints does not resolve the surplus problem on the whole, however, because diesel fuel supplies of 5.4-5.8 mln metric tons to the Russian market are too large for the domestic market alone, the analyst said. The surplus will stand at 1 mln metric tons at the least even subject to the partial resumption of exports. "It means refineries will have to revise production plans. I believe the government will revisit the discussion of constraints by the end of October and they will be softened for gasoline as well," Kondratyev noted.
The market perceives any hint of export relaxation as a threat of petroleum products outflow, Institute of National Energy Deputy Head Alexander Frolov noted. A rise in prices is highly likely to be the first reaction. "Nevertheless, easing of the export ban is an expected and justified step indeed, because we produce approximately two times more diesel fuel than we consume. Where can it be used if it cannot be exported? Exports were essentially authorized for feedstock refining companies only," the expert said.
The partial restart of supplies will be positive for the global market because petroleum product markets are experiencing a permanent shortage and the Russian fuel export ban in October has dramatically increased the deficit, Finam analyst Oksana Lukicheva said. "Therefore, global consumers are looking forward to the resumption of any supplies from Russia because the situation will immediately become less tense," she noted.