Russian oil refineries processed an average of 3.6 million barrels of crude per day in July \u2014 the lowest figure since 2002, according to Bloomberg. This figure is approximately a third below the seasonal average. Meanwhile, following a fire caused by a drone strike, Lukoil\u2019s Volgograd refinery halted operations on 31 July, Reuters reports.<\/p>\n
Briefly about the main points<\/strong><\/p>\n The average refining volume in July \u2014 3.6 million barrels per day \u2014 stands in stark contrast to the sector\u2019s previous output levels. According to estimates by the US Energy Information Administration, Russian refineries processed an average of 5.4 million barrels per day in 2024, and nearly 6 million in January 2022.<\/p>\n Lukoil\u00ab in Volgograd<\/a> suspended operations on 31 July following a fire caused by a drone strike. The refinery\u2019s nominal capacity is estimated at approximately 290,000 barrels per day. This represents around 5% of the average total Russian refining volume in 2024, although nominal capacity does not equate to actual production.<\/p>\n In its July review, the International Energy Agency noted that strikes on Russia\u2019s refineries and export infrastructure had simultaneously affected both the export of petroleum products and domestic fuel supplies. The market may be more sensitive to a reduction in the supply of petrol and diesel rather than necessarily crude oil.<\/p>\n A reduction in domestic refining does not necessarily mean a proportional drop in production: Russia may divert some of its crude oil for export. Back in May, the IEA noted that repeated strikes on refineries were reducing domestic oil consumption and contributing to an increase in Russian crude oil shipments.<\/p>\n The Russian government imposed restrictions in the spring petrol exports<\/a> for direct producers until 31 July, citing the need to stabilise the domestic market during the peak demand season. At the end of July, Russian Deputy Prime Minister Alexander Novak announced his intention to extend the ban until the end of 2026. The combination of restrictions and a decline in refining suggests increasing pressure on Russia\u2019s domestic fuel balance.<\/p>\n\n
The July slump and the shutdown of the Volgograd Oil Refinery<\/h2>\n
Pressure on the fuel market and the possibility of reorienting exports<\/h2>\n
The cumulative impact of the blows on the processing sector<\/h2>\n