Russia roils global market for diesel after Ukraine attacks

Refining Capacity at a 21-Year Low

Since March, a systematic campaign of drone strikes has dismantled significant portions of Russia’s refining infrastructure. According to Oilprice, Ukrainian forces have targeted at least 24 of Russia’s 34 large refineries in approximately 50 separate operations over the last 100 days. The result is a sharp contraction in production: as of early July, Russian refineries were processing an average of 3.91 million barrels of crude per day, a drop of more than 1.4 million barrels from the previous year’s average.

The impact is most visible at the Omsk refinery, which was struck on July 6. As the nation’s largest facility, Omsk processed roughly 22 million tonnes of crude in 2024. The strike disabled the primary ELOU-AVT-11 unit—capable of processing 8.4 million tonnes of crude annually—alongside damage to the AVT-10 unit. These distillation units are essential for separating crude oil into usable feedstocks, and their loss has severely limited Moscow’s ability to maintain fuel supply levels.

Market Volatility and Supply Shortages

The reduction in refinery output has forced Moscow to halt exports of gasoline and diesel to protect domestic supply. However, the internal market remains strained. Data from the St. Petersburg International Mercantile Exchange indicates that average daily sales of gasoline and diesel fell from a range of 118,000 to 150,000 tonnes between January and March to just 80,300 tonnes in June. Compared to the same month in 2025, June volumes were down 38%, while prices increased by 37%.

The Lloyd reports that these refinery disruptions, combined with broader maritime challenges, have created a significant supply shock for seaborne diesel.

Frontline Conditions and Military Leadership Changes

While the economic war continues, the conflict on the ground remains intense. CIA chief John Ratcliffe, speaking at a defense summit in Pennsylvania, provided a stark assessment of the human cost for Russian forces. What I would say is, our intelligence is consistent with some of the open-source reporting you may have seen in Ukraine. So the average life expectancy of a Russian recruit, right now, arriving on the battlefield in Ukraine, is estimated to be between 20 and 30 minutes, Ratcliffe said, as reported by The Independent.

Political volatility within Ukraine has mirrored these battlefield conditions. President Volodymyr Zelensky recently dismissed defense minister Mykhailo Fedorov after just six months, following a public dispute with the head of the armed forces, General Oleksandr Syrskyi. The move sparked protests in Kyiv as citizens demanded the reformer’s reinstatement.

Ongoing Infrastructure Strikes and Maritime Campaign

Ukraine’s campaign shows no signs of slowing. Beyond the refineries, Ukrainian forces have targeted maritime traffic, claiming 11 vessel strikes in the Sea of Azov and disrupting transit through the Kerch Strait and the Volga-Don waterway. Russia continues to retaliate, with the Russian defense ministry reporting strikes on port facilities in Odesa and Chornomorsk as of July 17, 2026.

The challenge for Russian operators is compounded by the speed of the strikes; repeat attacks on facilities such as the Moscow refinery, Norsi, and Syzran have prevented maintenance crews from restoring output. As the conflict enters the second half of 2026, the intersection of crippled energy production and persistent frontline attrition remains the primary factor to watch for both domestic stability in Russia and global fuel price trends.