Russian oil refining capacity hits record low amid Ukrainian drone attacks
Offline oil refining capacity in Russia reached a record high in August due to damage from Ukrainian drone attacks and extensive planned maintenance, according to Reuters calculations.
However, operational sites are expected to increase output to help offset this impact.
This month, Ukraine has escalated its drone assaults on Russia’s refineries and export facilities.
Refineries idling
These strikes target President Vladimir Putin’s primary funding source, occurring while the United States attempts to mediate a peace agreement between Moscow and Kyiv.
In August, Russia’s total offline primary oil refining capacity surged to an unprecedented 6.4 million tons. The calculations represent a 65% increase from earlier projections that were based on maintenance schedules.
This month, drone strikes on several refineries have led to a cumulative idling of 3.1 million tons, representing 48% of the total impact, according to calculations.
This month, approximately 1.2 million barrels per day, or 17%, of Russia’s refining capacity has been eliminated.
This figure surpasses peaks from May 2020 (due to COVID-19) and May 2022 (following Russia’s invasion of Ukraine), representing a 54% increase from July, according to the calculations.
Intensified attacks
Ukraine has escalated its attacks on Russia’s vital oil infrastructure, targeting numerous major refineries across various regions.
These assaults have struck facilities in the Volga region, specifically in the cities of Samara, Syzran, and Volgograd, impacting a significant portion of Russia’s refining capacity.
Further attacks have been reported at the crucial Baltic Sea port of Ust-Luga, a key export hub, as well as the Ryazan refinery and several other sites located in southern Russia.
These sustained Ukrainian strikes aim to disrupt Russia’s fuel supply and its ability to finance the ongoing conflict.
After Ukraine reported targeting two oil refineries overnight in Russia’s southern Krasnodar region, causing fires at both, Russia announced on Thursday that one of the fires had been extinguished.
Strikes on refineries have led the world’s second-largest oil exporter to increase crude exports. This comes as Washington urges China and India to curb their purchases of Russian oil.
Domestic impact and government response
Following disruptions to refinery operations caused by recent attacks, Russia has increased its August crude oil export plan from western ports by 200,000 barrels per day, according to the Reuters report.
With Russia’s peak seasonal demand for gasoline from tourists and farmers, attacks have intensified. Prior to this recent escalation, Moscow had already tightened its gasoline export ban in July to protect domestic supply.
Shortages of regular A-95 gasoline have been reported in parts of Russian-controlled Ukraine, southern Russia, and the Russian Far East. This scarcity is compelling drivers to opt for more expensive petrol alternatives.
On Thursday, Kremlin spokesperson Dmitry Peskov stated that Russia’s domestic fuel market is well-supplied and the situation is stable.
During a daily conference call, he told reporters that fluctuating fuel prices were due to a variety of factors.
“The government is taking active measures to ensure that the price level for energy and gasoline remains stable,” he said.
Industry sources estimated a 5% decline in production this month, indicating that increased processing at operational refineries will help lessen the effects of drone damage and ongoing maintenance.
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