A refinery in southwestern Russia owned and operated by state oil giant Rosneft has been taken offline and all production stopped, due to damage following a drone attack from Ukraine last week, Reuters reported on Thursday, quoting sources in the industry.
Rosneft's Kuibyshev oil refinery in the region of Samara on the Volga River was hit by a drone attack this weekend and had already halted half of its crude processing capacity after one of the two primary crude refining units at the facility caught fire.
Ukraine has stepped up attacks on oil refineries in Russia in recent weeks, which have reduced Russian refining capacity, and which, reportedly, have the White House concerned about rising international prices.
The United States has repeatedly urged Ukraine to halt its drone attacks on Russian oil refineries due to Washington's assessment that the strikes could lead to Russian retaliation and push up global oil prices, the Financial Times reported last week, citing sources familiar with the exchange.
Ukrainian drone attacks on Russian refineries in recent weeks have taken out as much as 600,000 barrels in daily processing capacity in Russia, according to commodity trading major Gunvor.
"It is significant because obviously this is gonna hit the distillate exports straight away," Gunvor chief executive Torbjörn Törnqvist told Bloomberg on the sidelines of the CERAWeek conference in Houston last week.
"So that will probably take down exports by a couple of hundred thousand barrels, so to me, it's a distillate problem," the executive added.
According to Reuters estimates, the amount of Russian oil refining capacity that has been taken offline due to Ukrainian drone strikes is 14% of Russia's total refining capacity.
Calculations show that 900,000 barrels per day of refining capacity have been taken offline by drone strikes, Reuters reported on Tuesday. This includes Lukoil's Norsi and Volgograd refineries, and Rosneft's Kuibyshev and Ryazan refineries, among others.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More