BAKU, Azerbaijan, September 26. Russia, which has recently banned the export of motor gasoline and diesel fuel, is expected to push those products back to the market, Cyril Widdershoven, a Middle East geopolitical specialist and energy analyst, a partner at Dutch risk consultancy VEROCY, and Global Head Strategy Risk at Berry Commodities told Trend.
“In theory there will be an increased shortage of these products globally. The production of gasoline and diesel by Russia, even if they are sanctioned by the West are still having a major impact on global markets and prices. However, the issue is less a problem than was originally expected, as overall storage capacity of Russia at present is way below what will be needed,” he said.
Widdershoven pointed out that most of the current production will be put in storage, but when filled Russia has two choices, either stop refining of these products, meaning overall cuts in crude oil volumes, which will be very hard on Russia’s economy, or to push them back into the market again.
“Market already expects the latter, as shown by volatility currently in crude oil and product prices,” noted the expert.
As for the OPEC, Widdershoven believes that it will not be doing anything right now, just waiting until Russia is hitting a brick wall and gets back to market.
Russia has implemented temporary export restrictions on motor gasoline and diesel fuel, as officially decreed by Prime Minister Mikhail Mishustin. This strategic move has been undertaken with the primary objective of stabilizing fuel prices within the domestic market.
The imposition of these temporary restrictions is anticipated to have a twofold impact. Firstly, it is expected to bolster the supply of fuel in the domestic market, thereby contributing to a reduction in fuel prices for consumers.
This decision follows earlier measures taken by the Government to address the challenges faced in the fuel market. Notably, the Government elevated the standards for the supply of motor gasoline and diesel fuel to the stock exchange, a measure aimed at enhancing transparency and market stability. Additionally, daily monitoring of fuel purchases for the agricultural sector has been initiated, accompanied by swift adjustments in volumes as necessary. These multifaceted efforts are geared towards ensuring the stability and accessibility of fuel resources for the benefit of both producers and consumers alike.
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