Citi and JP Morgan Views on Russia Fuel Export Ban Range 2-6 Weeks

The Russian diesel/gasoline ban that is underway does not have a timeline but sell side views and industry consultants offer some thoughts on duration below:

• Russia gasoline/diesel ban is likely to last 6-week according to Citi analysts.
• They said a prolonged ban of these fuels would not be in Russia’s interests and it could end up shutting in crude production.
• They added that Russia’s limited refined product storage could force refineries to trim operations and force crude production lower in winter.
• Citi added that domestic diesel demand for harvest is set to peak in the next 3-5 weeks before slowing in November.
• JP Morgan expects the ban to last a “couple of weeks, until harvest concludes in October.”
• They added that fuel shortages appear to not be extensive and instead concentrated in certain areas.
• JP Morgan analysts said the fuel ban could result in “substantially higher” outflows of crude because of limited storage options.
• A 1.1m b/d export ban on motor fuels would force cuts in refinery runs, leading to higher exports of crude JP Morgan analysts said.
• According to industry consultant FGE, “Once domestic supplies are replenished, Russia will have to resume exports due to a lack of spare storage capacity.” At the latest, Russian diesel exports are expected to resume in two weeks, possibly earlier, FGE said.