Russian fuel exports have approached their lowest level since 2020 following Ukraine’s drone strikes against oil refineries in Russia. The strikes have disrupted more than one million barrels a day of Russia’s refining capacity, a research group Energy Aspects has reported. Since the beginning of August, 16 of Russia’s 38 refineries have been hit, including one of Russia’s largest 340,000 barrel-a-day plant at Ryazan near Moscow.
The strikes have disrupted a major source of revenue for Russia. If they maintain the current rate, diesel exports are predicted to fall to their lowest monthly total in September since 2020, according to both OilX and Vortexa, which track cargoes. Benedict George, head of European petroleum products pricing at Argus, which reports commodity prices, told Financial Times the strikes seem to be Ukraine’s “most effective” campaign so far. He added that Russia needs the diesel for its tractors as it is the main fuel for the agricultural sector. It is also used by some tanks. Ukraine’s president Volodymyr Zelensky earlier this month also pointed to the success of the drone strikes, claiming that “the most effective sanctions – the ones that work the fastest – are the fires at Russia’s oil refineries, its terminals, oil depots”.
While Moscow has imposed export banks on Russian gasoline for the majority of the year, its diesel sales have remained unaffected. Russia is the second-largest diesel exporter in the world. As the UK and EU do not directly import Russian fuel, about half of its cargoes go to Turkey, followed by markets in West and North Africa and Brazil.
According to Mr George, Turkey is now turning to India and Saudi Arabia to make up for the loss, with premiums for diesel rising up to about $30 a barrel over the price of benchmark Brent crude oil. That’s the highest level since Israel’s summer war with Iran pushed prices to a 15-month high due to supply fears.
Last Thursday, Ukrainian drones travelled around 1,400km to strike the Gazprom Neftekhim Salavat oil refinery and petrochemical plant in Russia’s Bashkortostan region. Ukraine’s SBU security service claimed responsibility, saying the attack hit the heart of the facility and triggered a “major fire.”
Mr Zelensky said that Ukraine was increasing its long-range drone production and intensifying its strikes on Russia’s energy infrastructure.
He said: “Once the number of drones matches the Russians’, they will feel the fuel shortage and loss. We already see this increasingly. More drones are reaching targets.”
Yesterday, the US President Donald Trump posted on Truth Social what appeared to be a major shift in his stance on the Russia-Ukraine war. “After getting to know and fully understand the Ukraine/Russia Military and Economic situation and, after seeing the Economic trouble it is causing Russia, I think Ukraine, with the support of the European Union, is in a position to fight and WIN all of Ukraine back in its original form,” he wrote. “Putin and Russia are in BIG Economic trouble, and this is the time for Ukraine to act.”
