A Sunday drone attack on the Saratov refinery, owned by Russia’s oil giant Rosneft, prompted the facility to halt the intake of crude oil, a source with knowledge of the matter told Bloomberg on Monday.
The Saratov Refinery in the Volga region has the capacity to process 140,000 barrels per day (bpd) of crude, but it has now been forced offline due to Ukrainian drone strikes.
The Saratov refinery, which has been part of Rosneft since 2013, typically processes Russia’s flagship Urals crude oil and Saratovskoye field crude oil from the pipeline, as well as crude oil from the Orenburg fields shipped by rail.
The refinery has become the third Russian crude processing facility to have been damaged by Ukrainian drone strikes so far in August.
The halt to three major refineries would mean that Russia will see lower domestic gasoline and diesel supply while it will have more crude available for export as it doesn’t have too much storage for the unprocessed crude.
Last week, reports emerged that Russia is preparing to sharply increase crude oil exports this month after Ukrainian drone strikes disabled two major refineries, prompting a shift toward western port shipments.
Crude shipments from Russia’s western ports could increase to 2 million bpd in August, about 200,000 bpd more than previously planned, sources told Reuters last week.
Spot traders have reportedly started locking in Aframax tankers to handle the sudden increase, as onshore refining options collapse and terminal inventories build.
Ukraine and Russia continue to exchange strikes and fire ahead of the meeting between U.S. President Donald Trump and Russian counterpart Vladimir Putin planned for Friday in Alaska.
Russia’s demands include the Ukrainian government ceding eastern provinces, which it has indicated it would not agree to, and this casts doubts over the success of the Trump-Putin talks, ING’s commodity analysts Warren Patterson and Ewa Manthey wrote in a Monday note.
By Charles Kennedy for Oilprice.com
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