Russia's idle oil refining capacity record high after Ukrainian drone attacks
Damage from Ukrainian drone attacks and extensive planned maintenance have sent Russia's offline oil refining capacity to a record high in August, Reuters calculations show, though working sites are likely to spur output to help mitigate the impact.
Ukraine has stepped up its drone attacks on Russia's refineries and export infrastructure this month, striking Russia's biggest source of funding while the United States seeks to broker a peace deal between Moscow and Kyiv.
According to Reuters calculations, Russia's total offline primary oil refining capacity has reached a record monthly high of 6.4 million tons in August, up 65% from previous estimates based on maintenance plans.
Drone strikes at various refineries on various dates have idled a cumulative 3.1 million tons this month, accounting for 48% of the total impact, the calculations show.
They have knocked out around 17% of Russia's refining capacity, or 1.2 million barrels per day, this month.
That tops peaks hit in May 2020 due to COVID-19 and in May 2022 after Russia's invasion of Ukraine and is up 54% from July, the calculations showed.
Ukraine has targeted Russia's large refineries including in the Volga region cities of Samara, Syzran and Volgograd. The Baltic Sea port of Ust-Luga was also targeted, along with Ryazan and facilities in southern Russia.
Russia said that it had put out a fire at an oil refinery in the southern Krasnodar region after Ukraine said it had targeted two refineries overnight, sparking fires at both.
The strikes on refining have pushed more crude towards export from the world's No.2 oil exporter at a time when Washington is pressing China and India to reduce their purchases of Russian oil.
Russia has raised its August crude oil export plan from western ports by 200,000 bpd after the attacks disrupted refinery operations, three people familiar with the matter said.
The attacks also come as Russia's seasonal demand for gasoline from tourists and farmers peaks. Moscow tightened its gasoline export ban in July before the recent rise in attacks to help safeguard supply.
Gasoline shortages have been reported in some areas of Russian-controlled Ukraine, southern Russia and the Russian far east, forcing motorists to switch to more expensive petrol due to a shortage of the regular A-95 grade.
Kremlin spokesperson Dmitry Peskov said on Thursday that Russia's domestic fuel market is fully supplied and the situation is under control.
On a daily conference call with reporters, he said there were various reasons for fuel price swings.
"The government is taking active measures to ensure that the price level for energy and gasoline remains stable," he said, mentioning the gasoline export ban as one of the measures.
Industry sources said increased processing at working refineries would help mitigate the impact of drone damage and maintenance, estimating a production decline of 5% this month.
Comments