Russia’s Diesel Exports Plunge Amid Ukrainian Attacks on Refineries
Russia’s diesel exports plummeted in September to an eight-year low for the month as a recent wave of Ukrainian drone attacks has significantly disrupted the country’s refining system, causing fuel shortages in the domestic market and forcing the Kremlin to introduce restrictions on overseas sales.
Russia’s diesel and gasoil exports declined to just 755,000 barrels/day in September, the lowest seasonal figure since 2017, according to data from shiptracking company Vortexa.
However, volumes have declined since August, when they fell to around 790,000 b/d compared to 970,000 b/d in July, as Ukraine initiated a campaign of attacks on Russian refineries, export terminals and other oil infrastructure.
According to Matteo Ilardo, an analyst at risk intelligence firm RANE, Ukraine’s strategy reflects its growing capability and agenda at a time when oil prices are lower.
“Kyiv has developed and deployed long-range drones largely on its own, so this has less to do with what the West provides and allows to do and more with how Ukraine chooses to use the capabilities it has to pursue its own tactical goals,” he told OPIS.
These strikes have coincided with planned autumn maintenance, resulting in Russia’s refinery downtime surging to 1.6 million b/d in August and 2.0 million b/d in September, according to IIR Energy estimates.
“The Russian refining sector is facing unprecedented operational disruptions, with early September drone strikes prompting a tumble in crude runs,” Rystad Energy warned in a recent report. “Beyond drone attacks, the broader effect is compounded by continued sanctions, restricted investment, and escalating regional instability.”
Last week, the Russian government announced a partial ban on diesel exports until the end of the year, as well as an extension to an ongoing embargo on gasoline exports, to address shortages at home.
“Ukraine’s persistent attacks against Russia’s refinery industry – with 16 of the country’s 38 refineries having taken a hit since August – is having an effect on its diesel exports even before last week’s export ban kicks in,” Ole-Rikard Hammer from Arctic Securities said.
This sharp reduction in supplies is being felt mostly in Brazil and Turkey, as these two countries have been the main buyers of Russian diesel since the EU banned oil products from Russia in response to the invasion of Ukraine.
According to Vortexa, arrivals of Russian diesel and gasoil into Brazil plunged in September to just 50,000 b/d, the lowest level since the EU implemented the embargo in February 2023. This has translated into higher Brazilian demand for cargoes from the U.S., the Middle East and India which otherwise would have gone to Europe. As a result, the diesel crack in Northwest Europe strengthened to an average of $27/bbl in September from $23/bbl in August, according to OPIS pricing data.
In Turkey, arrivals of Russian diesel and gasoil fell in August but recovered in September to around 340,000 b/d, Vortexa said. Still, Turkey now has fewer surplus volumes available for export, tightening supplies in the Mediterranean region.
–Reporting by Jaime Llinares Taboada, jllinares@opisnet.com