Russian oil refining capacity drops 14.5%

• Russia’s oil refining capacity fell 14.5% this month due to Ukrainian drone strikes and technical outages.
• The reduction in refining capacity could lead to increased crude oil exports as Russia does not have enough storage space.
• Russia has extended its ban on gasoline exports until the end of 2024 to maintain domestic supply stability.

Reuters calculations showed on Friday that the share of Russian refining capacity offline this month rose from August to 14.5 percent of all processing capacity, amid Ukrainian drone strikes and planned and unplanned technical outages.

Russian oil refining capacity that is now offline rose 34 percent in September, according to estimates based on data from industry sources compiled by Reuters.

As more Russian refining capacity is now offline, this could lead to higher crude oil exports as Russia does not have much storage space to store crude oil in tanks.

Market sources told Reuters earlier this week that September loading plans for oil export terminals in Russia’s Baltic ports had been revised slightly higher.

Apart from some seasonal maintenance, Russia’s refining capacity saw several units idle due to the Ukrainian drone attacks on Russia’s oil and energy infrastructure.

Energy installations were key targets in the conflict on both sides.

Ukrainian attacks on Russian refineries and other energy infrastructure have become a fixture this year, with drones being the weapon of choice for carrying out attacks.

Ukraine continues to target refineries in Russia and some of these attacks have affected additional supply of products from Russian refineries.

In recent months, Russia has seen higher-than-expected maintenance and repair work at its refineries after Ukraine stepped up its drone attacks earlier this year on Russian refining capacity. In addition to unplanned repairs to repair damage caused by drones, some refineries underwent planned maintenance work. This led to a drop in Russia’s fuel production and exports earlier this year.

In mid-August, the Russian government said Moscow was extending his ban on gasoline exports from October to the end of December 2024 as it aims to keep domestic supply stable amid seasonal demand and scheduled refinery repairs.

By Tsvetana Paraskova for Oilprice.com

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