But key oil products – the fuels that are made by refining crude oil, such as diesel, jet fuel and gasoline – are facing even greater pressures. Our latest Oil Market Report highlights that diesel markets are particularly strained, with prices recently surging to record levels in Europe and North America. This has major ramifications for diesel consumers and the global economy.
 

Diesel is a critical fuel used for road transport, shipping, agriculture, mining operations and more. In 2025, it accounted for almost 30% of the world’s total oil consumption.

 

At the same time, Ukrainian attacks on Russian refineries are adding to the squeeze in diesel markets. Russia has historically been the third largest producer of refined oil products globally, but its output has fallen sharply as drone strikes have disrupted operations. Ukraine has been attacking Russia’s oil infrastructure since 2022, but the range of its drones has expanded significantly, particularly during the first half this year, enabling strikes deeper inside Russia. In the first eight months of 2026, Ukrainian drones have hit a Russian refinery every three days, on average.
 

The impact has been substantial. Russian refinery output in June fell by 30% compared with a year earlier, reaching its lowest level in more than 20 years. The government has since restricted exports of diesel – a significant strategic shift for a country that previously exported roughly half of its diesel and gasoil output – and started importing gasoline to ensure adequate domestic supplies.

 

A key issue is that many refineries around the world are already stretched to capacity. This leaves few available options to prevent a further tightening of supplies and higher prices in the coming months.