Diesel has been one of the hardest-hit energy products during the monthslong disruption of Strait of Hormuz tanker traffic. Diesel markets received little relief in the brief window when Hormuz transits appeared to be picking up, but the situation now appears even more dire than it did in March, with inventories low and more global capacity now off line, particularly in Russia. There is little refiners can do to boost diesel supply, prompting warnings that inevitably higher prices could ultimately lead to demand destruction. The key difference today compared to the initial near-closure of Hormuz following the Feb. 28 US-Israeli attacks on Iran is the crippling of Russia's refining fleet by persistent Ukrainian drone attacks. Russia is typically the world's second-largest diesel exporter, but now around half its primary refining capacity, or about 3.3 million barrels per day, is not operating, according to official data seen by Energy Intelligence. Russia's diesel production plunged to 1.18 million b/d in June, down 16% for the month and by one-third from a year earlier. Data from the first week of July shows continuing declines. In response, Moscow has imposed a ban on exports of all transport fuels to keep its domestic market supplied. Normally, Russia exports more than 40% of its diesel output. But current production is insufficient to meet typical domestic summer demand of around 1.1 million b/d, and the country is now importing some barrels. Russia's diesel inventories are in their fifth straight month of decline and by late June had dropped by 25% from February to 30 million barrels, potentially breaching minimum operational levels in some areas.