Russia loses about 600 barrels per day of refinery capacity due to Ukrainian strikes – Gunvor

Russian oil refining capacity has diminished by about 600,000 barrels per day as a result of Ukrainian drone strikes on Russian refineries.

Source: Bloomberg, citing Gunvor Group Ltd. Chief Executive Officer Torbjörn Törnqvist 

Quote: "Weekend drone strikes hit multiple plants in Russia, some deep inside its borders, sending diesel futures higher for a fourth straight session while gasoline futures climbed for a sixth," Bloomberg writes.

"It is significant because obviously this is gonna hit the distillate exports straight away," Törnqvist said during an interview at the CERAWeek by S&P Global conference in Houston on 18 March.

"So that will probably take down exports by a couple of hundred thousand barrels, so to me it’s a distillate problem," he added.

Gunvor was a major trader of Russian oil until Russia’s full-scale invasion of Ukraine, but withdrew from trading shortly after the start of the major war. 

Meanwhile, according to JPMorgan Chase estimates, Ukrainian attacks have taken out about 900,000 barrels per day of Russian oil processing capacity. 

Restoring capacity could take "several weeks, if not months," and explosions will add around US$4 per barrel of risk premium to global oil prices, analysts note. 

Törnqvist said crude oil markets are generally balanced and fairly valued, adding that US supplies will likely increase this year by about half compared to 2023 – by 700-800,000 barrels per day. However, he said overall supply growth from non-OPEC countries this year is unlikely to change.

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