Russian oil refineries set ablaze in second day of Ukrainian attacks

Russian oil refineries set ablaze in second day of Ukrainian attacks
A Ukrainian drone attack on the Nizhny Novgorod refinery led to the shutdown of its largest primary refining unit.
By bne IntelliNews March 13, 2024

Ukraine launched a second day of heavy drone attacks on Russian oil refineries on March 13, resulting in fires at key facilities. 

Ukraine has repeatedly used unmanned aerial vehicles (UAVs) to target Russian refineries in a series of attacks that started in January. The relentless attacks on Russian refineries have led to widespread disruptions in the nation's energy supply chain, exacerbating concerns over fuel shortages and export constraints.

The most significant attack on March 13 targeted Rosneft's largest refinery in the Ryazan region, regional governor Pavel Malkov confirmed on Telegram, where he also said preliminary information indicates there were injuries.

In a separate strike in the Rostov region, the Novoshakhtinsk refinery halted production, said regional governor Vasily Golubev on Telegram. He said UAVs crashed on the territory of the Novoshakhtinsk refinery. No casualties were reported, but part of the plant’s facilities were shut down. 

Both attacks follow a similar assault on Lukoil's NORSI refinery in Nizhny Novgorod on March 12.  A Ukrainian drone attack on the Nizhny Novgorod refinery led to the shutdown of its largest primary refining unit, halving the refinery's capacity, according to Kommersant daily. 

The refinery is one of the largest in central Russia. In 2023, according to Kommersant, the Nizhny Novgorod refinery processed 15.8mn tonnes of oil and produced 4.9mn tonnes of gasoline and 5.6mn tonnes of diesel fuel. The Nizhny Novgorod refinery is considered one of the most modern refineries in Russia and ranks fourth in terms of refining volumes in the country.

A Ukrainian source told Reuters that the attacks were conducted by Ukraine's SBU security service with the aim of reducing Russia's economic potential. 

Additionally, Ukrainian defence forces reportedly carried out overnight drone attacks on a Russian airbase in Buturlinovka and a military airfield in the Voronezh region.

The refinery attacks of the last two days are the latest in a series that began on January 21, when drones targeted the Novatek Ust-Luga gas processing complex situated in the Gulf of Finland. Subsequent strikes followed, with the Rosneft Tuapsin Oil Refinery's oil processing plant suffering damage on January 25.

In February, the Lukoil Volgograd Refinery's primary oil processing unit was disabled, followed by attacks on the Ilsky and Afipsky refineries' power plants in the Krasnodar region on February 9.

As fires rage at oil depots and refineries across Russia, authorities are grappling with the fallout of the attacks and scrambling to restore operations. The disruptions have sent shockwaves through global energy markets, with diesel fuel exports witnessing a sharp decline.

Previously the government introduced a temporary ban on gasoline and diesel exports in September 2023 to encourage more supplies to the domestic market. The government reintroduced a six-month exports ban starting on March 1 following the drone attacks.

Analysts surveyed by Kommersant estimate that the latest damage to Lukoil refinery could be partially compensated by loading up other units, the market may lose a volume of petrol and diesel equivalent to about 2.5% of domestic consumption. 

The cost of fuel already jumped on March 12 following the attacks, with the price of AI-95 petrol on the SPIMEX exchange rising in the European part of Russia by 1.3% to RUB59,400 per tonne. Diesel fuel price rose by 1.4% to RUB60,800.

The damaged unit AVT-6 has a capacity of 25,000 tonnes per day (tpd) of oil, or 53% of the Nizhny Novgorod Refinery's total primary refining capacity. Refinery's total capacity is 17mn tonnes per year (tpy) of oil. 

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