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Market Chatter: Russia Refinery Output Reportedly Hit After Ukrainian Drone Strikes

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Nearly all major oil refineries in central Russia have been forced to halt or scale back operations following a recent wave of Ukrainian drone strikes, Reuters reported on Wednesday, citing sources familiar with the situation.

The disruption has reportedly hit facilities accounting for more than 83 million metric tons per year of refining capacity, or roughly 238,000 tons per day, representing about a quarter of Russia's total refining capacity.

Reuters said the affected plants produce over 30% of Russia's gasoline output and around 25% of its diesel supply.

Russia has already imposed a gasoline export ban from April through the end of July to stabilize domestic supply.

Ukraine has intensified drone attacks on Russian energy infrastructure in recent weeks, with Russian officials noting that the number of targeted refineries has doubled since the start of the year. The strikes have also hit pipelines and storage sites.

The energy disruptions add pressure to Russian finances as oil and gas taxes account for roughly a quarter of total revenue.

Among the facilities listed as affected are the Kirishi refinery in western Russia, the Moscow oil refinery, and plants in Nizhny Novgorod, Ryazan, and Yaroslavl.

Kirishi, one of the country's largest refineries with a capacity of about 20 million metric tons per year, has been fully shut since May 5, according to sources.

Another major facility, Nizhegorodnefteorgsintez, or NORSI, with an annual capacity of around 17 million tons, was attacked on May 20. It remains unclear whether it is operating at partial capacity.

Russia's energy ministry did not immediately respond to' request for comment.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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