Russia’s indefinite ban on diesel exports threatens to aggravate a global shortage
From February 5, 2023, the European Union will no longer purchase petroleum products such as diesel, gasoline or lubricants from Russia.
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Russia imposed an indefinite ban on the export of diesel and gasoline to most countries, a move that risks disrupting fuel supplies ahead of winter and threatens to exacerbate global shortages.
In a government decree signed by Prime Minister Mikhail Mishustin, the Kremlin said Thursday that it would introduce “temporary” restrictions on diesel exports to stabilize fuel prices on the domestic market.
The ban, which came into immediate effect and applies to all countries apart from four former Soviet states, does not have an end date. The countries exempt from the ban include Belarus, Kazakhstan, Armenia and Kyrgyzstan, all of which are members of the Moscow-led Eurasian Economic Union.
Russia is one of the world’s largest suppliers of diesel and a major exporter of crude oil. Market participants are concerned about the potential impact of Russia’s ban, particularly at a time when global diesel inventories are already at low levels. Oil prices jumped as much as $1 a barrel on the news on Thursday, before settling lower for the session.
International benchmark Brent crude futures traded 0.9% higher at $94.13 a barrel on Friday afternoon in London, while U.S. West Texas Intermediate futures rose 1.1% to trade at $90.62.
Energy analysts said the vague language used in Russia’s announcement made it difficult to assess exactly how long the ban would remain in place and warned that Moscow could once again be seeking to weaponize fuel supplies ahead of another winter heating season.
A spokesperson for the Kremlin said Friday that the fuel export ban would last for as long as necessary to ensure market stability, Reuters reported.
In the weeks leading up to Thursday’s intervention, analysts said Russian diesel exports had come under pressure due to the weakness of the ruble, domestic refinery maintenance and government-led efforts to increase domestic supply.
“All deals agreed before the regulation took effect are still on, meaning the likelihood of an immediate halt in diesel and gasoline exports is unlikely, most probably it would take 1-2 weeks for the impact to transpire,” Viktor Katona, lead analyst at Kpler, said in a research note published Friday.
“By that point, however, the government might already annul this specific piece of legislation, as abruptly as it was published,” he added.
What impact could the ban have?
Prior to the Kremlin’s full-scale invasion of Ukraine in February last year, Russian refineries exported an estimated 2.8 million barrels per day of oil products. That figure has since fallen to around 1 million barrels per day, according to ING, but Moscow still remains a major player in global energy markets.
Warren Patterson, head of commodities strategy at ING, said in a research note published Friday that Russia’s ban on fuel exports was a major development ahead of the Northern Hemisphere winter, a period which would typically see a seasonal pick-up in demand.
“The middle distillate market was already seeing significant strength ahead of this ban with inventories tight in the US, Europe and Asia as we head into the Northern Hemisphere winter,” Patterson said, citing factors such as OPEC+ production cuts, recovering air travel and Europe’s struggle to replace Russian middle distillates after a ban came into effect in February.
“The loss of around [1 million barrels per day] of Russian diesel in the global market will be felt and only reinforces the supportive view we have held on middle distillate cracks and as a result on refinery margins,” he added. “How much upside really depends on the duration of the ban.”
Oil storage tanks in Tuapse, Russia, March 22, 2020.
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OPEC kingpin Saudi Arabia said on Sept. 5 that it would extend its 1 million barrel per day production cut through to year-end, with non-OPEC leader Russia pledging to reduce oil exports by 300,000 barrels per day until the end of the year. Both countries have said they will review their voluntary cuts on a monthly basis.
“The purpose of the ban is apparently to address tightness and high prices in domestic Russian markets, where high oil prices combined with a weakened rouble, must be painful for Russian consumers,” Callum Macpherson, head of commodities at Investec, said Friday.
“However, there are also echoes with disruptions to Russian gas supplies to Europe that started in 2021. They also began as supposedly temporary disruptions while gas was held back to fill domestic storage — we all know what happened there,” he added.
“It might be a coincidence that this ban has been announced the day after Russia had a tough time at the UN, or it might be a broadening of the policy of using energy as a weapon in reaction to that.”
In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss the new Tesla Model S/X “refresh”, robotaxi service is coming, a new EV price war in China, and more.
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Kia’s electric SUV has already become a hit in several overseas markets. The EV5 is now arriving as the first electric Kia to be assembled in Singapore, as it rolls out to new global markets.
Kia EV5 arrives as its first locally made EV in Singapore
Shortly after its introduction at the 2023 Chengdu Motor Show, Kia launched the EV5 in China, with prices starting at about 20,000 (149,800 yuan).
Kia is now seeing a full-on recovery in China, largely thanks to the new electric SUV. Its joint venture partner in China, Yueda Kia, ranked first in sales growth among JV brands.
In China, Kia sold over 248,000 vehicles last year, the first time it has crossed the 200,000 mark since 2020. The EV5 is made at Yueda Kia’s manufacturing plant in China and exported to overseas markets like Australia and Thailand.
In fact, the EV5 is currently the fourth best-selling EV in Australia this year through April, ahead of every BYD vehicle.
The EV5 is slightly smaller than the Tesla Model Y at 4,615 mm in length, 1,875 mm in width, and 1,715 mm in height.
After launching the EV5 in Singapore on May 28, Kia hit a milestone. The electric SUV arrives as Kia’s first locally assembled EV in the region.
The EV5 was officially launched during an event at Hyundai Motor Innovation Groupe Centre Singapore, where it will be made. It will join other Hyundai Motor electric cars, including the IONIQ 5 and IONIQ 6. Hyundai also builds the IONIQ 5 robotaxi here and exports it to the US.
Kia’s distributor, Cycle and Carriage, will sell the EV5 in three variants: Air, Earth, and a sporty GT-line. Two battery sizes will be available, 64.2 kWh and 88.1 kWh, providing range of 400 km and 540 km, respectively.
Prices for the base Air trim start at $194,000 (SDG), including COE. The Earth and GT-Line models start at $210,500 (SDG) and $260,000 (SDG) with COE.
Later this year, Kia will launch the global version of the EV5, which will be made at its Autoland Gwangju manufacturing plant in South Korea. It will be sold in overseas markets, including Europe and Canada, but not the US.
Kia confirmed the EV5 will be “exclusively for the Canadian market” in North America. It will be available in FWD and AWD powertrains. Two battery sizes will be offered: 60.3 kWh or 81.4 kWh, providing a range of up to 500 km (310 miles).
Source: Cycle & Carriage Kia Pte Ltd, The Straits Times
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Do we smell a three-peat? The team at Ford Performance is once again competing at the annual Pikes Peak International Hill Climb, and this year is bringing a “Super” version of the all-electric Mustang Mach-E… At least we think there’s a Mach-E in there somewhere.
Pikes Peak—the “Race to the Clouds.” This annual event spanning 12.42 miles to an elevation of over 14,000 feet in the mountains above Colorado has been celebrated for over 100 years. While its hill climb is rooted in tradition and traditional vehicles, it has become an annual opportunity for EV engineers to showcase how much better all-electric models can be.
Last year, Rivian, Hyundai, and Ford Performance all impressed, with the former two automakers snagging records for their vehicle types, while Ford’s “F-150 Supertruck” took the “King of the Mountain” crown for the fastest climb of the day.
This past January, we learned that Ford Performance planned to defend its title at Pikes Peak with its third all-electric demonstrator in as many years. At the time, we only saw a sheeted vehicle that appeared to be relatively low with a massive spoiler, but the glowing front emblem left no doubt that it was a modified version of the Mustang Mach-E.
Today, Ford Performance unveiled the BEV it will use to climb Pikes Peak, which it is calling the Super Mustang Mach-E. Have a gander.
Super Mach-E will try to hold Ford’s Pikes Peak crown
Ford Performance shared the images seen above in an Instagram post with the following caption:
12 miles of mountain road. 156 turns. 14,115 feet of elevation. This is the @pikespeakhillclimb, and we’re bringing 6,125 lbs of downforce — and @romaindumas_official — to take it on with the Super Mustang Mach-E.
From the post, we’ve learned the Super Mustang Mach-E will be driven up Pikes Peak by none other than veteran French racer Romain Dumas. Dumas has a wealth of experience in some of the world’s largest (and longest) races, including the 24 Hours of Le Mans, Nürburgring 24 Hours, and the 24 Hours of Daytona.
He has been contracted to Ford Performance since 2022 and has won two of his five Hill Climb victories with the American automaker in the past two years (although the 2023 SuperVan victory was in the division and second overall). Could Dumas tally his sixth career victory at Pike Peak with a three-peat with Ford in the Super Mustang Mach-E?
Ford Performance and Romain Dumas have shown they can do it, so it’s a serious possibility. We will find out on June 22, 2025, when the 103rd running of the Pikes Peak International Hill Climb takes place.
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