HomeMediaLatest NewsNext year will be acute the problems with the sale of diesel fuel

Next year will be acute the problems with the sale of diesel fuel

09 November 2022

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

Alexey Belogoryev, Deputy Principal Director on Energy Studies of the Institute for Energy and Finance, commented to Davydov.Index on the possibility of partially redirecting diesel fuel supplies from export to the domestic market.

If we talk about whether increasing demand for diesel fuel could, to a certain extent, compensate for the oil industry revenues lost as a result of restrictions on the export of oil and petroleum products, then I can give only two considerations.

First, the main restrictions on this export have not yet been introduced - they will come into effect in February 2023, when the EU embargo on the supply of petroleum products from Russia comes into force. So the problems faced by Russian oil companies can be considered only the harbingers of serious difficulties that will arise in February.

And the second consideration is this: the very growth in demand for high-quality diesel fuel in Russia this year was possible, and it could well be 30%. However, it was most likely caused by an increase in the need for fuel from the side of the Armed Forces against the backdrop of a special military operation, since military equipment mainly uses diesel fuel.

To sum up: yes, the current increase in demand for diesel fuel provides oil companies with some support, but it is short-term and is associated with an anomalous surge in demand from the Armed Forces, which in any case is temporary. And besides, the main problems with the export of petroleum products are ahead of us.

Therefore, I would not be too hopeful about the possibility of redirecting supplies to the domestic market. They certainly exist, but they are limited. Problems with the sale of diesel fuel next year will be acute. As, most likely, with the sale of dark oil products, especially fuel oil.

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