Strikes on three major Russian oil refineries: Russia's military faces fuel supply problems

As a result of the Ukrainian attacks, production at Russian oil refineries fell to a 12-year low. At the same time, oil production has fallen to a 19-year low.

The Moscow Times and the analytical service Siala reported on this.

According to the Moscow Times, by the end of 2024, oil refining at refineries in the Russian Federation, taking into account the December dynamics, is expected to reach 266.9 million tons, which is 8.1 million tons lower than last year. This is the lowest figure since 2012, when refineries processed 265.4 million tons of crude.

The reason for the decline to a 12-year low was unscheduled repairs and a reduction in margins due to the Russian government’s attempts to curb the rise in fuel prices for households.
According to sources, the decline in oil refining in 2024 was mainly due to downtime of primary units at the attacked Tuapse oil refinery, Lukoil-Nizhegorodnefteorgsintez oil refinery and Novoshakhtinsk oil refinery .

However, only Nizhegorodnefteorgsintez oil refinery is among the leaders of the decline in motor fuel production. Therefore, the reduction in primary process utilization did not lead to a proportional decrease in fuel production.

In addition, a number of large oil refineries producing commercial gasoline and diesel fuel, including Omsk, Achinsk, Kuibyshev oil refineries and Salavatnefteorgsintez oil refinery in Bashkiria, increased their utilization compared to last year, compensating for losses due to plant downtime.

According to experts, companies are trying to pass on the cost of forced repairs of equipment to the cost of fuel, which is being prevented by the government by regulating the cost of fuel for households.

However, this still led to the largest jump in retail gasoline prices in 13 years. The price increase was 11%, rising to 60.57 rubles per liter, making it the first time in 6 years that gasoline prices have risen significantly higher than general inflation. For comparison, in 2023, gasoline prices rose by 7.2%, in 2022 – by only 0.9%, and in 2021 – by 8.9%.

This is happening against the backdrop of record low crude oil and gas condensate production in 13 years. The average daily production rate is 1428 thousand tons per day. This is the lowest level since 2011, when production amounted to 1424 thousand tons per day. At the same time, oil production fell to 1254 thousand tons per day, which is the lowest level since 2005.

However, Russia still managed to receive more than 18 trillion rubles in oil and gas revenues in the first 9 months of 2024. Despite the sanctions imposed by the EU, the US, and the UK.

This was achieved by raising taxes for oil and gas companies, “suspending” dividend payments to shareholders, and using the so-called shadow fleet, tankers.

Ukrainian intelligence has identified a total of 545 vessels of the Russian shadow fleet, which are used to circumvent Western sanctions imposed on Russia and Iran.