Ukrainian drone attacks on Russia refineries may disrupt diesel market: IEA

By Bloomberg News

The flurry of Ukrainian drone attacks on Russia’s oil refineries risks disrupting global markets for petroleum products, the International Energy Agency said.
 

Ukrainian drones have ramped up attacks on Russia’s oil industry this year in an attempt to disrupt fuel supplies to the military and curb the Kremlin’s revenue. About 500,000 to 600,000 barrels a day of the country’s crude processing capacity could be offline this quarter on a gross basis, before offsets, according to the IEA’s monthly report.  

The shutdown of damaged refineries or units of between four to eight weeks for repairs “could mean a significant loss” of Russian oil-product exports, the Paris-based agency said on Friday. International markets “rely on Russian exports of diesel, naphtha and jet fuel, while refining systems in Asia absorb substantial quantities of the country’s straight-run and cracked residue to boost upgrading unit feedstocks.” 

 

The IEA was echoing an earlier statement from the US Defense Secretary Lloyd Austin, who warned that Ukrainian attacks “could have a knock-on effect” on the global energy market. 

So far the actual drop in refinery runs was much lower. Russia’s official weekly refinery output data through late March is consistent with crude runs at 5 million to 5.2 million barrels a day, rather than the 4.6 million barrels a day that a bottom-up assessment of the refinery outages would indicate, according to the IEA. 

Some of the nation’s facilities have been relatively quick to repair the damaged equipment. Only Rosneft PJSC’s Tuapse refinery near the Black Sea — attacked in late January — remains offline, but it isn’t clear whether that’s due to the drone strike or initial planned maintenance. It’s likely to resume operations in mid-May, the IEA said, citing reports.