Kremlin says refinery strikes will not derail Ukraine talks, as Ukraine hits Novokuibyshevsk

Moscow treats attacks on its refineries as tolerable while diesel stays tight, with European futures more than doubled this year and IFX reporting a plan to extend the export ban.

The Kremlin has said that Ukrainian strikes on Russian refineries will not derail peace talks, and the claim fits what Moscow has done all month. Ukraine said it hit the Novokuibyshevsk refinery, and the plan for team-level talks between Russia, Ukraine and the US in early November has not changed.

That sits badly with the idea that a pause in strikes was shielding the negotiations. The Wall Street Journal had said Ukraine's halt on Russian energy targets was expected to last until after the US midterm elections, and possibly further into November. Yet strikes continued through every stage of October's talks, and the Kremlin now describes them as tolerable rather than disqualifying. Whatever was agreed, the pause did not hold, and the talks went ahead regardless.

On substance, nothing has moved. Moscow's demand for the rest of Donbas is unchanged, and a source close to the Kremlin has said Putin would negotiate only after securing the remaining 11% of the region. Talks were tentatively set for early to mid-November in Abu Dhabi or Switzerland. A process that meets while the underlying demand stays fixed gives little reason to expect the strikes to stop. It is also unclear whether a Kremlin aide's earlier warning about strikes on November 4 still carries any weight.

The damage is physical, and the market has noticed. Brent has climbed more than 75% this year, and European diesel futures have more than doubled. IFX reports that Russia plans to extend its diesel export ban to the end of January, with exemptions. If that goes ahead, it could weaken the effect of China's quotas and Europe's reserve release.

For oil buyers the tape is the better guide than the talk.