NYMEX Heating Oil Holds at $4.74 as Russian Refinery Losses Deepen
Ukrainian drone attacks have pushed Russian crude processing to 21-year lows, leaving ULSD futures to weigh competing supply signals before the heating season.
Ukraine continued pounding Russian refinery infrastructure in near-daily drone attacks as of late August (2026-08-25), oilprice.com reported, extending a campaign that has systematically degraded Russia's ability to supply its own market and export beyond it. NYMEX heating oil front-month traded at $4.74 per gallon as of 2026-09-10, down 0.21%, a modest decline relative to the scale of processing losses now working through global product markets.5
Russian crude-processing rates averaged 3.91 million barrels a day through July (2026-07), the lowest since March 2005, according to EA Analytics data compiled by Rigzone. That level sits more than 1.4 million barrels a day below the year-earlier average. The International Energy Agency separately estimated Russian plant throughput at 3.8 million barrels a day for June (2026-06), down 1.6 million barrels a day year-on-year.3
The deterioration had been building for months. OilX estimated Russian refinery runs had already dropped to 4.69 million barrels a day in April (2026-04), at that point the lowest in more than 16 years, per Rigzone. By summer the situation had worsened further, with no clear stabilisation visible in the monthly data.1
Moscow responded in late May (2026-05-26). Oil companies were advised to curb sales of petroleum products to foreign markets following a government meeting chaired by Deputy Prime Minister Alexander Novak, Interfax reported, citing sources familiar with the discussion. Formal restrictions on diesel and jet fuel exports were under consideration.1
U.S. markets had been registering the tightening well before any formal Russian action. Wholesale diesel futures surged 26% through July (month of 2026-07), finance.yahoo.com reported. U.S. commercial oil stocks sat 6% below the five-year seasonal average for the reporting week ended July 17 (2026-07-17), despite a modest build in that week, with inventories at Cushing, Oklahoma and in the Strategic Petroleum Reserve both at multi-year lows.4
Diesel crack spreads climbed to their strongest levels in years over that period, as constrained product availability and export restrictions lifted refining margins sharply, finance.yahoo.com reported. The widening of product cracks over crude showed how decisively fuel markets had moved ahead of raw material benchmarks.4
September 10's near-flat ULSD print does not reflect a resolved supply picture. Consensus signals across market indicators lean mildly bearish on the front-month, suggesting the July surge has been partially absorbed. But a contrarian bullish signal tied to export-restriction policy carries a moderate weight, and the two are pulling in opposite directions.
Russia's fiscal position shapes the export decision directly. The IEA estimated oil production fell to roughly 8.7 million barrels a day in May (2026-05), about 5% below the year-earlier level and around 10% short of that month's output target. Yet oil export volumes held near 7.4 million barrels a day in May (2026-05), generating approximately $20.8 billion in revenues. Oil and gas are budgeted to deliver around 8.92 trillion roubles of approximately 40 trillion roubles in total federal revenues for 2026, according to Moscow's own projections. Cutting exports to relieve domestic shortages carries a direct revenue cost the government has resisted accepting.2
A strike on a Moscow-region refinery on June 19 (2026-06-19) illustrated the domestic exposure. Russia's Federal Antimonopoly Service demanded explanations from fuel suppliers after retail prices jumped sharply near the damaged facility, news.az reported. The agency noted the episode did not indicate a large-scale shortage in the capital, but the price response showed how quickly localised refinery damage registers in retail markets.2
For ULSD, the pivotal variable is whether Moscow formalises diesel export restrictions. Such a move would withdraw product from Atlantic Basin markets at a time when U.S. inventories are lean and winter demand is building. Continued Ukrainian strikes on refinery infrastructure into September (2026-09) would compound any limitation Russia imposes — Russian processing rates, already at 21-year lows per EA Analytics data, have little further buffer to absorb additional damage.1,3,5