16 September 2026
Executive Summary
Drone attacks have forced half of Russia’s six largest diesel-producing refineries to substantially reduce or halt production, adding another source of pressure to already tight international fuel markets.
The six plants collectively account for approximately half of Russian diesel production.
According to Reuters calculations based on industry data:
- The Kirishi refinery is shut.
- The Volgograd refinery is operating at around one-quarter of capacity.
- NORSI is operating at around one-quarter of capacity.
- Taneco was attacked again on Sunday, although the extent of damage was not immediately clear.
The International Energy Agency says a Russian refinery was successfully struck by drones on average approximately once every three days during the first eight months of 2026.
Russia has already restricted exports of:
- Gasoline.
- Diesel.
- Jet fuel.
in an effort to protect domestic availability.
The development comes as Middle Eastern disruption has simultaneously tightened international energy supply.
The global diesel market is therefore being squeezed from two geographically separate directions at the same time.
UK Impact
The UK is not dependent upon Russian diesel imports in the way it was before sanctions.
But international diesel is traded through a global market.
Reduced Russian exports can therefore affect prices elsewhere by increasing competition for alternative supplies.
Diesel is particularly important because it powers:
- Road haulage.
- Agriculture.
- Construction.
- Backup generators.
- Industrial machinery.
- Some shipping.
- Rail transport.
Higher diesel prices can therefore spread quickly through business operating costs.
Global Impact
Russia was historically one of the world’s major diesel exporters.
Before the latest export restrictions, Turkey and Brazil were among the largest buyers of Russian diesel.
Those customers must increasingly compete for replacement supply elsewhere.
The effect can cascade through international markets.
At the same time:
- Saudi oil exports are disrupted.
- Hormuz shipping remains severely impaired.
- Middle Eastern crude prices remain elevated.
- Refinery feedstock costs have increased.
US diesel prices have already risen above $6 per gallon nationally, according to price tracker GasBuddy.
Agriculture is particularly exposed because diesel is essential for:
- Tractors.
- Harvesting.
- Irrigation.
- Road transport.
- Fertiliser logistics.
Higher fuel prices can therefore ultimately contribute to higher food-production costs.
Our View
Businesses should treat diesel exposure as a supply-chain cost rather than simply a vehicle expense.
Companies should ask:
- How much transport cost depends upon diesel?
- Are haulage contracts fuel-indexed?
- Can carriers impose surcharges?
- Are agricultural suppliers exposed?
- Are construction projects fuel-sensitive?
- Do backup generators depend upon diesel?
- How much emergency fuel is stored?
- Are storage arrangements safe and compliant?
- Can deliveries be consolidated?
- Can route efficiency be improved?
- Are alternative transport modes available?
- Can customer contracts absorb fuel increases?
- Could suppliers experience margin pressure?
- Are critical suppliers financially resilient?
- Could higher diesel costs combine with other commodity inflation?
The most important feature of the current market is correlation.
Russian refinery disruption would ordinarily be manageable through alternative global supply.
Middle Eastern disruption would ordinarily be mitigated by other producers and refiners.
When both occur together, the available buffer becomes considerably smaller.
Risk Indicator: HIGH – DIESEL, LOGISTICS & GLOBAL ENERGY SUPPLY
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The information contained within these Market Alerts is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment, regulatory or insurance advice. Whilst every effort has been made to ensure accuracy at the time of publication using multiple reputable and independently verified sources, geopolitical events, legislation, regulation and market conditions may change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.
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