FINWIRES · TerminalLIVE
FINWIRES

Market Chatter: Mongolia Grapples With Surging Fuel Costs Amid Russian Supply Shortage

By

Mongolia is facing acute energy strains and long queues at petrol stations as domestic fuel shortages in Russia, its primary supplier of gasoline and diesel, drive up import costs, Reuters reported on Thursday citing officials familiar with the matter.

According to Bolorchuluun Tsendgombo, director of the policy and planning department in Mongolia's food ministry, retail fuel prices have surged to nearly $1.50 to $2.00 per liter, up from roughly $1.00 per liter in the spring, the report said.

While Russia maintains an official export ban on gasoline and diesel, inter-governmental supply pacts exempt Mongolia, allowing Russian diesel supplies to rise 7% year-on-year to 1.05 million metric tons between January and July, alongside an increase in gasoline exports to 515,000 tons, the report added.

However, the report said that monthly deliveries have begun to wobble, with motor fuel exports declining to 173,000 tons in July from 186,400 tons in June, while jet fuel supplies dropped 40% to 32,000 tons.

has reached out to Mongolian government for comments request.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Related Articles

Oil & Energy

US Oil Update: Crude Eases As US-Iran Strikes, Ship Attacks Threaten Supplies

Crude oil futures were little changed in after-hours trading on Wednesday as renewed US-Iran military strikes and attacks on tankers in the Strait of Hormuz heightened fears of further disruptions to global crude supplies.Front-month West Texas Intermediate crude eased by 0.5% to $90.63 per barrel, while Brent futures were up 0.7% to $95.32/bbl.Soojin Kim, research analyst at MUFG, said that crude is now more than 30% higher since the Middle East conflict began in February, with refined-product markets facing even greater tightness.US commercial crude oil inventories decreased by 4.5 million barrels to 424.5 mmbbls in the week ended Aug. 28, the Energy Information Administration said in its weekly report released Wednesday.Crude inventories were about 1% above the five-year average for this time of year, the EIA said. The draw is significantly above Investing.com's estimate of a 400,000-barrel draw for the week ended Aug 28.Hostilities in the Middle East remain elevated, with President Trump threatening more attacks if Iran responded to additional overnight strikes on Iranian targets by the US military on Tuesday.Trump floated renaming the Hormuz after himself on Wednesday, but it is not yet clear how the US President would attempt to implement a name change in the strait.The US Central Command said in a post on X that the strikes "follow recent attempted attacks by the IRGC against commercial shipping in the Strait of Hormuz and against American service members."On Wednesday, Centcom said that the US military has redirected 86 commercial vessels, disabled three and boarded two to ensure compliance as of Sept. 2.Iran's Islamic Revolutionary Guard Corps, in response to the latest strikes, attacked US military bases in Kuwait, Jordan, Bahrain, Kuwait and the UAE, and said its aim was now to drive American forces out of the Middle East.On Wednesday, the IRGC said that two tankers were disabled after being struck by mines in the Hormuz, forcing their crews to abandon the vessels, multiple media reports said.The IRGC Navy said it had already warned ships about the risks of navigating the mined channel, while signaling further action against vessels that ignore the warning.Iran's Persian Gulf Strait Authority added a further 11 ships to its blacklist on Wednesday, barring the vessels from transiting through the Hormuz for "non-compliance."PGSA, the authority set up by Iran to manage the strait, now prohibits 57 vessels from transiting the strategic waterway.Saxo Bank strategists said that disruption fears remain the key price driver as commercial vessel traffic through the Hormuz remains curtailed.On the supply front, US Treasury Secretary Scott Bessent said 17 million barrels of crude exited the Strait of Hormuz on Monday, while claiming that Iran doesn't control the strait.US Energy Secretary Chris Wright reiterated that figure, adding that exports are averaging about 8 million b/d, with 4 to 5 million b/d bypassing the strait via pipelines."When you factor in bypass volumes, it suggests Persian Gulf oil flows are above pre-war levels," ING strategists said in a note on Wednesday, but said that these numbers are uncertain.

Oil & Energy

Europe Refinery Runs Seen Rising in 2026, Fuel Demand Weakens, Kpler Says

Europe's refinery runs are set to rise in 2026, but high fuel prices are weakening demand and widening the supply-demand gap, Kpler strategists said in a note on Wednesday.European refineries should average 12.2 million barrels per day in 2026, up about 130,000 b/d from 2025, as margins remain healthy and maintenance stays light.Kpler expects Q4 runs to average 12.45 million b/d, compared with 11.93 million b/d in Q4 2025 and a five-year average of about 11.4 million b/d.A lighter turnaround schedule is driving the strong Q4 run rates rather than postponed maintenance, while IIR data shows little significant rescheduling despite geopolitical events.Major refinery turnarounds often require years of planning, while safety rules and limited specialist labor and contractors make significant schedule changes difficult, Kpler said.European refined product demand should fall about 150,000 b/d over the year in 2026, reversing an earlier forecast for broadly flat consumption.Diesel accounts for most of the deterioration in demand, with the latest forecast showing a 190,000 b/d annual decline versus an earlier estimate of about 50,000 b/d.European diesel demand plunged 460,000 b/d over the year in Q2 as higher prices and unfavorable base effects weighed heavily on consumption, Kpler said.Average diesel prices across the five largest EU economies rose about 30% over the year in April-May amid the US-Iran conflict, while Q2 2025 demand had increased about 120,000 b/d.Panic buying ahead of the escalation lifted March 2026 diesel demand, setting up a sharper pullback in April, while prices briefly eased in June and early July after the ceasefire.Diesel prices began climbing again in mid-July as geopolitical tensions returned, keeping Q3 demand under pressure, with consumption expected to decline by about 180,000 b/d over the year.Gasoline demand should grow about 20,000 b/d in 2026, down sharply from roughly 100,000 b/d growth in 2025 as higher prices limit consumption despite resilient road mobility.Jet fuel demand has held up better, with Kpler forecasting a 42,000 b/d increase in 2026, broadly matching its pre-war outlook despite initial concerns over tighter supply.Europe adapted to the loss of about 400,000 b/d of Middle Eastern jet fuel supply by increasing US and Nigerian exports and raising European refinery yields.Naphtha demand should rise by about 10,000 b/d in 2026 as higher steam-cracker operating rates and the return of facilities support consumption, while tighter Asian supply improves European cracking economics.Kpler sees downside risks to its demand outlook, warning that prolonged elevated diesel prices could trigger further downward revisions to European diesel consumption.Strong refinery utilization and weaker demand should lengthen Europe's core refined product balances over the year versus 2025, with light maintenance supporting higher output and availability, Kpler said.

Oil & Energy

Update: US Energy Secretary Says 17 Million Barrels Crossed Hormuz Monday, Bessent Signals Iran Isolation

(Updates with US Department of Energy's email response in paragraphs 3 and 6-7.)Energy Secretary Chris Wright said Monday marked a record flow of oil through the Strait of Hormuz since the conflict began, with over 17 million barrels shipped, according to a CNBC interview clipped and shared by the White House's Rapid Response account on X on Wednesday."Monday was our record ever since the conflict began - over 17 million barrels of oil flowed through the Strait of Hormuz on ships on Monday; if you add the bypass export pipelines, more than left the region in the pre-conflict," Wright said.In response to' request for comment, Ben Dietderich, US Department of Energy Spokesperson, clarified that Wright was referring to both oil and oil products when discussing volumes leaving the Strait of Hormuz.On Venezuela, Wright said current oil production now exceeds 1.2 million barrels per day and could top 1.5 million b/d during the first half of next year."I think we'll be well over 1.5 million b/d by the first half of next year - and Venezuelan production will be over 2 million b/d by the end of this decade," Wright said in the CNBC interview.Dietderich said Wright was in Venezuela at present. "Today in Caracas, Venezuela, Secretary Wright is overseeing the signing of several multi-billion dollar oil, gas and electricity deals," Dietderich said.The contracts will more than double Venezuela's oil production in less than five years and modernize its grid, Dietderich said, adding that the deals are between Venezuela and Chevron (CVX), Eni (E) and GE Vernova.Separately, Wright told Bloomberg in an interview on Wednesday that Venezuela's rising output could benefit US refiners because many facilities rely on crude grades similar to the country's oil, making the increase a major gain for US energy buyers, according to a post on Rapid Response.Meanwhile, US Treasury Secretary Scott Bessent said Wednesday that the US plans to cut Iran's external connections, signaling a broad effort to isolate Tehran, according to a Fox News interview shared by the White House's Rapid Response X account."We are going to sever every tie that [Iran] has to the outside world... This is all hands on deck," Bessent said.The US Department of the Treasury did not immediately reply to' request for comment.Price: $55.51, Change: $-0.02, Percent Change: -0.04%

$CVX$E