Why Russia's Diesel Shipments Are Rapidly Increasing

Russian Diesel's Dramatic Shift in Global Markets

Russian diesel, once a key driver of rising prices in the global middle-distillate sector throughout 2025, has become a major source of downward pressure by early 2026. This turnaround has effectively ended a year-long period of strong refining margins. The European diesel crack spread, which climbed from $16.70 per barrel in January 2025 to $34.17 per barrel in November due to severe supply shortages from Russia, has since dropped to an average of $21.70 per barrel in January 2026. The return of Russian diesel to the market—helped by refinery repairs, increased production, and a rebound in exports to about 900,000 barrels per day in December—has softened margins. Although EU sanctions briefly tightened the market in late January, renewed Russian exports have altered global trade flows, notably reviving shipments to Brazil. This highlights both Russia’s ability to recover from refinery attacks and the limitations of sanctions when discounted fuel remains in demand.

2025: Supply Disruptions and Market Tightening

The surge in diesel crack spreads during most of 2025 was largely the result of a sharp drop in Russian exports, which hit a five-year low of 586,000 barrels per day in September. This supply crunch was triggered by sudden events, starting with a Ukrainian drone attack on the Ryazan refinery in January—a facility responsible for about 5% of Russia’s refining capacity. Throughout the year, repeated strikes continued to disrupt operations, peaking in November with a record 14 attacks, including one on the Afipsky refinery. Reports suggest that over 20 refineries were affected in 2025, with up to 20% of national capacity offline at times due to attacks or maintenance. As a result, refinery throughput fell to around 5 million barrels per day in September, prompting Russia to restrict diesel exports and impose a temporary ban for non-producing companies, which was later extended through March 2026.

Recovery and Market Rebalancing

The tight market conditions began to ease in December. Russian refinery operations bounced back more quickly than anticipated, causing diesel crack spreads to fall steadily, reaching $19.89 per barrel by mid-January. Diesel production averaged 1.8 million barrels per day in early January 2026—the highest since January 2025—with ultra-low sulfur diesel making up the bulk of output. Overall refinery runs increased from 5 million barrels per day in September to 5.5 million in December, defying expectations that repairs would be delayed by restricted access to Western equipment. Russian operators demonstrated a surprising ability to restore capacity rapidly.

Export Flows and Strategic Shifts

Not only did production recover, but export volumes also surged. Despite significant damage to the Tuapse refinery from a drone strike in December, ultra-low sulfur diesel shipments resumed by mid-January. According to Kpler, two cargoes departed on January 10 and 14, bound for Turkey and Libya. At the Primorsk terminal, January’s loading schedule is projected to hit 2.2 million tonnes—a 27% increase from December—rising from 440,000 to 528,000 barrels per day. This sets a new record for Primorsk, emphasizing its growing role as exporters shift away from the increasingly risky Black Sea route. Overall, Russian diesel exports rebounded from about 590,000 barrels per day in September to 900,000 in December, marking a full recovery compared to the previous year.

Rising Inventories and Policy Adjustments

Higher output has led to a build-up in Russian diesel stocks, reaching a three-year peak of 27.6 million barrels. With domestic supply now considered sufficient—even during winter—Russian authorities are debating lifting the export ban for non-producing companies.

Market Impact and Future Outlook

While the initial recovery put pressure on refining margins, the diesel crack spread has since strengthened, reaching $25.43 per barrel by January 21 as colder weather and seasonal demand took hold. This improvement is likely to support further Russian exports, especially to markets where alternative supplies are scarce and price sensitivity is high.

Case Study: Brazil’s Diesel Imports

Brazil exemplifies these shifting dynamics. The country’s chronic shortage of refining capacity makes it heavily reliant on imported diesel, making discounted Russian supplies attractive. However, Brazilian imports from Russia dropped sharply in the second half of 2025 due to shrinking Russian supply and increased political risk. Imports fell from 247,000 barrels per day in March—when then-U.S. President Donald Trump threatened new sanctions if no peace deal was reached with Ukraine—to just 49,000 barrels per day in November, when those sanctions were enacted. U.S. diesel filled the gap in late 2025, but this shift was temporary. By December, Brazilian imports of Russian diesel rebounded to 181,000 barrels per day, indicating that supply needs, competitive pricing, and waning patience with U.S. pressure outweighed concerns about relations with Washington. Additionally, since November 2025, nearly all Indian diesel exports to Brazil have come from Nayara Energy’s Vadinar refinery, which is sanctioned and operates exclusively on Russian crude.

Key Takeaways

• Resilience to Attacks: Russian refineries have shown a remarkable ability to recover quickly from drone strikes, suggesting stable utilization rates ahead as Ukrainian attacks diminish.
• Shifting Export Needs: As refining capacity is restored, Russia’s need to export crude oil may decrease, potentially leading to lower crude exports in the future.
• Sanctions and Market Realities: Western efforts to limit Russian oil product sales remain weak. As long as Russian diesel is discounted and demand remains robust, economic incentives will continue to outweigh political risks in global fuel markets.

By Natalia Katona for Oilprice.com

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