Ukraine continues to attack Russian oil refineries with unmanned aerial vehicles (UAVs/drones), but the effectiveness of these attacks is not high, Germany-based bne IntelliNews reported on June 27.
Because UAVs only carry an explosive payload of 5-50kg, not 500kg like bombers, drone "swarms" can hardly destroy an oil refinery, but can only damage the facilities there.
The attacks have high media value for Kiev, but so far they have had little practical impact on Russia's energy export revenues or on international prices for crude or refined oil products.
The attacks reduced Russia's oil refining capacity by about 14%, but since the Eurasian giant has 2.5 times more refining capacity than it needs, the drop had little impact on the Russian economy or domestic fuel prices, according to a report by experts Michael Liebreich, Lauri Myllyvirta and Sam Winter-Levy for the Carnegie Endowment for International Peace, bne IntelliNews reported.
Ukraine has been conducting a campaign of drone attacks on Russian oil refineries since early 2024. While the move has provided a morale boost for Ukraine, it has had little practical impact on Russia’s oil business. Photo: EuroNews
According to data from the Russian Federal Statistical Service (Rosstat), domestic retail fuel prices in Russia are extremely stable. Domestic wholesale prices have some fluctuations, but these movements can be explained by fluctuations in the international market and are less dramatic than price fluctuations in the wholesale oil product market in the United States.
Diesel and gasoline production has been falling since early March, but such declines in amplitude and duration have been observed before, and even at the lowest point of the decline, production was still well above historical levels since 2018 (excluding the Covid-19-affected year of 2020, when production was unusually low and therefore not suitable for comparison).
Even export shipments did not show any clear and definitive fluctuations that could be attributed to the consequences of Ukrainian UAV attacks.
Media reports indicate that damaged equipment at many Russian refineries has returned to service after two to three weeks of repairs, and refining volumes reported by Bloomberg have fallen from their peaks but remain above their troughs and are once again within normal volume ranges.
Russia has been importing some gasoline from its neighbor and close ally Belarus, which has been widely reported in the media. But the volume in question is just one cargo ship a week – less than 0.5% of its weekly consumption – while Russia continues to export naphtha and diesel.
Given that no naphtha-to-gasoline converters were attacked, the imports were most likely for logistical reasons rather than a nationwide fuel shortage.
The real cost to Russia from the wave of attacks on the refineries is the cost of repairs – likely in the tens of millions of dollars per plant. That’s a lot of money compared to the cost of attacks with cheap Ukrainian weapons, but far from the billions of dollars that are expected.
For oil companies, the loss could be as high as $15 a barrel on the converted volume. Russia refined an average of 5.2 million barrels of oil a day in April this year, compared with 5.5 million barrels a day in January, according to Bloomberg.
Assuming that all 300,000 barrels per day not accepted into refineries were exported as crude oil rather than a product basket, this conversion would result in a $135 million loss in April.
Meanwhile, according to data from the Center for Research on Energy and Clean Air (CREA), Russia earned more than $16 billion from exporting oil and oil products during the same period.
“The Russian government does not care whether oil companies sell their volumes as crude or oil products. They tax crude oil at the wellhead quite heavily, using a formula linked to global prices, and then tax corporate profits. Corporate profits increase when oil companies export products instead of crude oil, but the impact on the state budget is quite small,” the Carnegie Endowment for International Peace said.
Minh Duc (According to bne IntelliNews)
Source: https://www.nguoiduatin.vn/don-tap-kich-cua-ukraine-vao-nha-may-loc-dau-nga-chi-nhu-muoi-dot-go-a670889.html
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