Key Takeaways:
Russia's six-month ban on aviation kerosene exports tightens global jet fuel supply as Ukrainian drone strikes push domestic refinery runs to their lowest in more than a decade and a half.
Russia imposed a six-month ban on aviation kerosene exports effective June 1, the government said, as refinery runs fell to a 16-year low of 4.69 million barrels a day following sustained Ukrainian attacks on energy infrastructure.
"The aim of this decision is to ensure stability in the domestic fuel market," the Russian government said in a statement announcing the restriction, which runs through Nov. 30.
The ban covers aviation kerosene including fuel purchased on exchange. Russia's average refinery throughput dropped to about 4.69 million barrels a day in April, the lowest level in more than 16 years, according to energy analytics firm OilX. Deputy Prime Minister Alexander Novak recently advised oil companies to reduce foreign sales of fuel products after a meeting on domestic supply, Interfax reported.
The restriction threatens to tighten global jet fuel supply at a time when the Strait of Hormuz crisis has already disrupted crude and refined product flows to Asia, pushing diesel and jet fuel spreads to $50-$80 a barrel from $15-$20. Russia is one of the world's largest exporters of refined petroleum products, and any sustained reduction in its outflows risks compounding upward pressure on international fuel prices.
Ukrainian drone strikes have targeted Russian refineries and pipeline facilities in recent months, reducing processing capacity and forcing the government to prioritize domestic needs over exports. The decline in refinery operations has increased pressure on Moscow to curb foreign sales, particularly during periods of higher seasonal demand for aviation fuel. Novak stressed the need for "constant monitoring of the situation in the domestic oil-product market" and coordination between federal agencies and companies, according to the government statement.
The export ban adds to a wave of supply-side restrictions across Asia. China has banned all kerosene exports, South Korea capped them, and India raised taxes to discourage outflows, according to the Economist. Those measures have already sent the spread between crude and both diesel and jet fuels to $50-$80 a barrel from $15-$20 before the disruptions. Jet fuel now costs twice as much in Singapore, Asia's trading hub, as it did two months ago.
The ban's six-month duration signals that Moscow expects the refinery capacity crunch to persist through the peak summer travel season and into the fourth quarter. If Ukrainian strikes continue at their current pace, Russia's ability to restore processing capacity may be limited, keeping global jet fuel markets under sustained pressure.
This article is for informational purposes only and does not constitute investment advice.
