Oil industry observers had anticipated a revival in production in November, following the easing of the Russia-related diesel export restrictions that had been in place at the end of September into early October 2023. In reality, last month’s figures came in softer than analysts expected. Market analysts tracking the sector noted this shift as a temporary soft patch, reflecting ongoing adjustments within Russia’s refinery network and changing export dynamics.
During the summer, Russian diesel output hovered near 1.85 to 1.9 million barrels per day. In November, the level edged down to about 1.8 million barrels per day, signaling a pullback from the peak. October saw a further decline to around 1.65 million barrels per day as several refineries shifted toward producing fuel oil, reallocating capacity in response to evolving market incentives and process economics.
Industry insiders expect December production to stabilize closer to the summer norm, with diesel accounting for roughly one third of total oil product output in Russia. This projection hinges on continued adjustments in other product streams, notably a reduction in aviation fuel production, which has weighed on overall product mix. For November, aviation fuel output dropped to roughly 195 thousand barrels per day, a level that surpassed the severity of similar months in 2020 and underscored the sensitivity of the refinery fleet to demand shifts and regulatory conditions.
On the trading floors, gasoline and diesel prices in Russia surged in 2023 as the supply-demand balance faced disruptions. In response, the government implemented a suite of measures aimed at stabilizing prices and preserving export revenue streams. Policy moves included curtailing outbound fuel shipments, raising export taxes, and modifying certain market support mechanisms. Some of these interventions were subsequently relaxed as markets reassessed risk and price pressures eased in pockets of the year.
Looking ahead, price trajectories for gasoline and diesel are expected to track inflationary pressure with modest increases that could amount to 20–25 kopecks per liter in January 2024. This outlook was discussed in a recent interview with a senior academic at a leading economics department, who emphasized the role of macroeconomic forces, currency dynamics, and policy signals in shaping fuel costs for Russian consumers and businesses alike.
Official guidance from the government previously suggested steps to increase winter diesel supply on the domestic stock exchanges, a move aimed at reinforcing energy security during the colder months. This approach aligns with broader plans to ensure a steady balance between domestic demand and export opportunities while refining the mix of refined products available to the market.