Diesel Futures Climb As Russia-Ukraine Peace Talks Appear To Have Stalled

Diesel futures (+1.9%) are climbing this morning as Russia-Ukraine peace talks have seemingly come to a standstill. RBOB (+.1%) is moving higher in sympathy while European (-.1%) and American (-.2%) crude oil benchmarks are drifting lower, but only just.

Ukraine isn’t slowing down its offensive in hopes of an agreement to end the three-year war can be reached, however, as it ramps up attacks on Russia’s energy assets. Kyiv confirmed another successful drone strike on the 170mb/day Rosneft Syzran refinery and a grain and oil export facility overnight.

Right on cue the EIA published a note yesterday highlighting the geopolitical factors contributing to elevated global diesel prices. Refinery outages in Russia and Kuwait, sanctions levied on Moscow by the EU, and the aforementioned Ukrainian strikes on Russian energy infrastructure have pushed distillate crack spreads to new 2025 highs.

A group of varied lobbying groups for petroleum and renewable fuels including the API, SIGMA and Growth Energy combined forces to urge the White House to pass legislation allowing year-round sales of E15 (without the debacle seen this spring in the Midwest) and to provide more clarity on Small Refinery Exemption criteria for the Renewable Fuel Standard.

P66 reported a brief upset in a coker unit at its 265mb/day Sweeny TX refinery. That event was short-lived and didn’t seem to impact other units at the plant.