Russian Deputy Prime Minister Alexander Novak said on Wednesday that the diesel agreement with the United States is linked to higher Russian refining and production and means additional taxes for the budget. He spoke to journalists at Russian Energy Week in Moscow, calling the agreement “a positive signal for our economy”, and saying it brings spending on the social sphere and opportunities for investment.
Russian Finance Minister Anton Siluanov said on Tuesday that Russia has no export duties on diesel and that the exports will be reflected in companies’ financial results, on which they pay taxes into the budget system. He said companies will be able to export diesel and earn revenue and foreign currency, which matters for the balance of payments, Interfax reported.
Novak said on October 12 that Russia could reach 3 million to 3.5 million tons a month of diesel supplies to world markets by the end of the year, as before the crisis. On Wednesday, he said supplies will go to world markets, including the United States, and that this is the volume Russia previously supplied, more than 10% of the world market.
Trump’s October 9 post lists more than 300,000 tons “immediately,” 500,000 tons in November and 1 million tons “immediately thereafter.”
Russian refinery throughput was 3.7 million barrels per day in July, the lowest in more than 20 years, against capacity of about 6.5 million, according to KSE. A September 15 report said three of Russia’s six largest diesel refineries were shut or running at about a quarter of capacity after Ukrainian drone strikes. It put diesel exports below 1 million tons in June, citing trader estimates reported by Reuters, against about 2.5 million tons a month a year before that, or 3.3 million to 3.4 million with gasoil.
Russia fired 39 ballistic missiles and more than 120 drones at Kyiv and Kharkiv overnight into October 14, CNN reported. Zelenskyy said at least 600,000 people lost power. He said Saturday that “Gifts to Putin will not lead to peace”.
By MIchael Kern for Oilprice.com
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