May 21, 2024
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Russian Oil Refinery Production Decline Contributes to Export Drop

Russia’s central bank reported on Thursday that the country’s oil refineries experienced decreased production in the first quarter of this year, contributing to a decline in exports.

The bank’s report revealed that goods exports fell from $105.1 billion to $97.9 billion compared to the same period last year, although specific figures for oil exports were not provided.

The decrease in exports was attributed partly to unforeseen repairs prompted by drone attacks on some refineries. Ukrainian drone strikes, in retaliation to Russian air strikes and infrastructure damage, disrupted fuel production in Russia.

The central bank emphasized that export values continued to decline due to external trade constraints and global price reductions in gas, coal, and several metals.

Lower refinery production also exerted downward pressure on exports, although the year-on-year decrease in export value moderated partly due to buoyant oil prices.

Additionally, the bank noted that high interest rates and a weakened Ruble compared to the previous year contributed to a 10% year-on-year decline in goods imports.

According to OilPrice.come, Ukrainian drones targeted the primary refining unit of Russia’s third-largest refinery, Taneco, southeast of Moscow, more than 800 miles from the front line earlier this month.

The refinery, with a capacity to process 340,000 barrels per day (bpd) of crude oil, saw its primary refining unit, capable of processing 155,000 bpd, hit by the attack.

According to Reuters calculations from the beginning of April, as much as 900,000 bpd of Russian refining capacity had been taken offline due to Ukrainian drone strikes, highlighting the significant impact of the conflict on Russia’s oil industry.

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