Anastasia Levchenko, researcher at the Gaidar Institute’s Industrial Organization and Infrastructure Economics Department spoke to the Nezavisimaya Gazeta daily about the factors behind rising global diesel prices, the impact of the shortages on the Russian market and the prospects for a resumption of oil supplies from Persian Gulf countries.
According to Anastasia Levchenko, the global rise in diesel prices is not yet leading to a direct pass-through of fuel costs to the Russian market, as the price-smoothing mechanism and export restrictions act as buffers. However, the situation at Russian oil refineries is affecting domestic supply: reduced production creates a risk of temporary fuel shortages in certain regions.
Anastasia Levchenko also assessed the U.S. initiative to restore the energy infrastructure of Gulf countries. She noted that the announced amount of $10 billion is insufficient to fully cover the damage, while existing alternative supply routes cannot fully replace the Strait of Hormuz.
“The impact of the global diesel crisis on Russia is twofold and asymmetric. On the one hand, the domestic market is shielded from the direct pass-through of global prices thanks to the price-smoothing mechanism and export restrictions. On the other hand, the global shortage exacerbates domestic problems related to reduced processing volumes at Russian refineries. Consequently, the key factor driving Russian prices is not so much the global cost of diesel as the volume of domestic production. In this context, imports serve as a fallback measure to make up for temporary shortfalls in domestic supply," noted Anastasia Levchenko.