Russian fuel crisis grows as Ukraine steps up drone attacks on refineries

[Data analyzing in commodities energy market: the charts and quotes on display. US WTI crude oil price analysis. Stunning price drop for the last 20 years.]
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Ukrainian drone attacks have cut into Russian oil refining by nearly 20% on certain days and reduced Russia's diesel exports towards their lowest levels since 2020, the _Financial Times_ reported Tuesday.

Of Russia's 38 refineries, 16 have been hit since the start of August, some of them multiple times, including one of Russia's largest fuel processing facilities, the 340,000 bbl/day facility at Ryazan near Moscow, disrupting more than 1 million bbl/day of the country's total refining capacity, according to Energy Aspects.

Diesel exports, if they maintain the current rate, would fall to the lowest monthly total in September since 2020, although Russia has not yet suffered domestic shortages of diesel, whose production exceeds domestic demand by more than 50%, _FT_ reported [https://www.ft.com/content/8f8caa82-0792-4d4e-b350-c484e024d725].

While Russia - the world's second-largest diesel exporter, with about half its cargoes going to Turkey - has imposed export bans on gasoline for much of this year, its diesel sales abroad have been unrestricted so far.

Premiums for diesel have risen this month to $25-$30/bbl over the price of benchmark Brent crude oil, the highest since Israel's war with Iran in July, Benedict George, head of European petroleum products pricing at Argus, told _FT_.

Crude futures rose Tuesday following four straight sessions of losses, partly because of Ukraine's continued strikes against Russian oil facilities and the potential for additional restrictions on Russian fuel exports.

Ukraine said its military struck two Russian oil distribution facilities in the Bryansk and Samara regions overnight.

"The news stories supporting prices were another attack on Russian distribution facilities and NATO talking tough about Russia’s incursion into NATO airspace," Scott Shelton of TP ICAP said in a note.

Front-month Nymex crude (CL1:COM [https://seekingalpha.com/symbol/CL1:COM]) for November delivery finished +1.8% to $63.41/bbl, front-month Brent November crude (CO1:COM [https://seekingalpha.com/symbol/CO1:COM]) closed +1.6% to $67.63/bbl, and U.S. natural gas futures (NG1:COM [https://seekingalpha.com/symbol/NG1:COM]) rose for the first time in five sessions, with the front-month October contract settling +1.7% at $2.853/MMBtu.

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