Fuel processing in Russia has fallen to its lowest level in the past 16 years
Pictured is the Gazpromneft MNPZ Moscow Oil Refinery. Photo: Maxim Shipenkov / EPA
In May, the AFU carried out a record number of strikes on Russia’s oil infrastructure since the start of the full-scale war. Against this backdrop, the country risks facing a fuel shortage at the peak of the tourist season, Bloomberg reports.
Details. As the agency writes, in May Ukraine attacked Russian facilities connected with fuel production at least 16 times. Drones struck eight of Russia’s ten largest refineries, and some of them were attacked several times in a row.
Denis Morokhin, an economic columnist for Novaya-Europe, noted that as of May 28, 11 oil refineries in Russia were either not operating or were running at less than half capacity.
According to Bloomberg’s estimate, at least 30 strikes were carried out against Russian oil infrastructure over the course of the month alone, more than in any other month of the war.
In addition to refineries, Ukrainian drones struck export terminals, oil pipeline infrastructure, pumping stations, and storage facilities. As a result, fuel production inside Russia may decline even further.
Impact on the market. Against the backdrop of these attacks, oil refining in Russia fell to a 16-year low. According to data from the analytical company OilX, in May Russian refineries processed an average of 4.58 million barrels per day, 13% less than a year earlier.
According to Novaya-Europe’s calculations, as of May 20, about 32% of Russia’s oil refining capacity had been taken offline, accounting for roughly 28% of the country’s gasoline production.
By the end of May, daily supplies of AI-95 gasoline to the European part of Russia had fallen to about 5,000 tons, around one-third of last year’s level, Bloomberg writes. At the same time, exchange prices for this type of fuel rose by more than 20% compared with last year.
A new crisis? As the publication notes, Russia is still far from the fuel crisis of 2023, and major disruptions are being recorded only in certain areas, mainly in the annexed regions of Ukraine. Fuel prices have also risen only slightly: since the start of the year, the average price of gasoline has increased by just over 2 rubles.
Moscow’s position. The Kremlin says there is currently no threat of a fuel shortage. On May 21, Dmitry Peskov explained the decline in refinery productivity in some regions by seasonal repairs and claimed that fuel supply and demand in Russia remain balanced.
Context. Starting May 31, gasoline in annexed Crimea will be sold only by coupons. The fuel shortage on the peninsula arose amid AFU attacks on the Novorossiya highway, which connects Rostov-on-Don with Simferopol.
Today, the government introduced a ban on the export of jet fuel until the end of November. In addition, a temporary ban on gasoline exports is already in effect in the country and will remain in place at least until the end of July.