Swedish fuel prices are rising rapidly again. After gasoline increased by 1.35 kronor over two days, diesel is now going up by another 90 öre and is approaching 24 kronor per liter. The price surge stems from an increasingly strained international fuel market, where US President Donald Trump has pointed to Ukraine’s attacks on Russian oil refineries as a contributing factor.
After a long period of significantly lower Swedish fuel prices, the trend has once again reversed. On Monday and Tuesday, gasoline prices rose by a total of 1.35 kronor per liter and are now around 18.30 kronor.
On Wednesday, there was a sharp increase in diesel prices by 90 öre. This puts the price close to 24 kronor per liter, according to the fuel retail chains’ stated corporate prices. Diesel has not been this expensive since early April, and gasoline is at its highest level since the end of May.
The rise occurs despite the Swedish carbon dioxide tax on fossil fuels having been reduced by about three kronor per liter including VAT during this period. The latest price increase is therefore mainly explained by developments in the international market.
Trump: Ukraine Contributes to the Shortage
Some attention has been directed at Ukraine and its increasingly intense attacks on the Russian oil industry. During a visit to Ireland this weekend, US President Donald Trump called on Ukraine’s President Volodymyr Zelensky to stop targeting Russian refineries.
“Zelensky needs to do one thing. He needs to stop knocking out Russia’s diesel fuel. He can target other objectives, but not diesel, because he is causing a diesel shortage,” Trump said.
The president further claimed that the attacks “hurt the world” and stated that he personally raised the matter with Zelensky. Trump’s wording goes further than what available information supports if interpreted as Ukraine being solely responsible for the rising prices. However, there is considerably less doubt that the Ukrainian attacks have, in fact, disabled parts of Russia’s refinery capacity and contributed to a tighter diesel market.
Reuters reported Wednesday that the refineries in Syzran and Saratov have halted production after Ukrainian drone attacks. At the Syzran facility, a central distillation unit is said to have been so badly damaged that repairs are expected to take at least a month. Russia has at the same time limited its exports of, among other things, diesel to secure the domestic supply.
Less Russian Diesel on the World Market
The effect does not necessarily stop at the Russian border. When refineries are shut down and Moscow responds by holding back more fuel for domestic use, the amount of diesel reaching the international market decreases.
Russia is a significant producer and exporter of refined petroleum products. AP notes that Ukraine’s attacks on oil infrastructure have contributed to production problems and the Russian export limits. Ukraine, meanwhile, defends the attacks by stating that the refineries are legitimate military targets since oil revenues finance Russia’s war effort and since Russia itself regularly targets Ukrainian energy infrastructure.
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The diesel shortage has also become apparent in the US. The American average price has surpassed six dollars per gallon, equivalent to 15.50 kronor per liter, which is a record by American standards but still far below Swedish levels. It is in this context that Trump has demanded that Kyiv choose other Russian targets.
Multiple Reasons Behind the Price Increase
However, putting all the blame on Ukraine does not tell the whole story. The world market has simultaneously suffered disruptions in the Middle East as a result of the war with Iran and problems with exports from the region.
Together with the loss of Russian refinery capacity, this has created an unusually strained market, especially for diesel. Reuters described European diesel prices on Wednesday as near record highs, pointing both to reduced deliveries from the Middle East and production disruptions at Russian refineries.
Several energy analysts assess that disruptions in the Middle East weigh more heavily in the overall price increase than Ukraine’s military attacks on Russian energy facilities. For Swedish motorists, however, an analysis of the main cause is less interesting than the fact that the international struggle for diesel and other oil products is now being felt at Swedish pumps, despite previous tax reductions in Sweden.