Page 28 - RusRPTJun24

The attacks have compelled Moscow to implement a six-month ban on gasoline exports and import gasoline from Belarus as well as asking Kazakhstan to create a reserve of 100,000 barrels in case of emergencies. One of the world's largest oil producers has been forced to slash its refining capacity that is damaging the economy it relies on to fund the ongoing war in Ukraine.
Ukrainian strikes have achieved what Western sanctions have not: reducing Russia's ability to convert crude oil into the fuels needed to power its military.
But the strategy has made the US very nervous with Secretary of Defence Lloyd Austin expressing concerns that these strikes might "have a knock-on effect in terms of the global energy situation" by pushing up global oil prices. That hasn’t happened.
Ukraine insists that targeting Russia's refineries will instead drive down international oil prices. By limiting Russia's refining capabilities, Ukraine effectively forces Moscow to export more crude oil, increasing supply and driving prices down.
“Russia is exporting more crude, while its refined exports have hit near-historic lows,” Tymofiy Mylovanov, rector of the Kyiv School of Economics (KSE) and former economics minister, said in a tweet.
Moscow exported just over 712,000 tonnes of diesel and other petroleum products in the last week of April, a drop from more than 844,000 tonnes in the same week in 2023,” Mylovanov added. Monthly exports of crude oil, however, increased by 9% from February to March, reaching their highest level in nine months and their third highest since Western sanctions on Russian crude oil took effect in December 2022.
To drive the point home, a Ukrainian drone hit a Gazprom oil refinery in Salavat (Salavatnefteorgsintez) in Russia’s republic of Bashkortostan 1500km from the Ukrainian border, the first time the region has been struck since the war started.
“This Gazprom refinery is one of Russia's largest oil refining and petrochemical production complexes. It specialises in the production of gasoline, diesel fuel and other types of petroleum products. In 2022, the Salavat refinery processed 6.7mn tonnes of oil,” Mylovanov said.
In 2023, Russia produced approximately 10.1mn barrels of oil per day – about the same level as pre-war – half of which was refined domestically to produce fuel products, including gasoline and diesel, consumed by the military and the domestic market. The remaining 50% was exported as crude oil to refineries abroad. Although Russia continues to export fuel products to Turkey, China, and Brazil, most Western nations have ceased importing Russian refined fuels. The Ukrainian strikes have knocked out up to 900,000 barrels per day of Russian refining capacity, leading to repair delays due to complex equipment and Western sanctions preventing access to specialised components.
28 RUSSIA Country Report June 2024 www.intellinews.com