Ukrainian drone attacks have damaged the Ryazan, NZNP and Norsi refineries in Russia this week, according to sources and various media reports, causing diesel prices in Europe to climb.
Russia's official news agency TASS reported Wednesday that an unmanned aerial vehicle hit Rosneft's 340,000 barrels/day Ryazan refinery, some 200 kilometers southeast of Moscow, causing a blaze and various casualties. The crude distillation and heat exchanger units were damaged, according to sources.
Meanwhile, Russian news agency Interfax said that the 110,000 b/d NZNP refinery in Rostov, near occupied Ukraine, was shut on Wednesday morning after its defense systems destroyed three drones, which caused them to fall in the vicinity of the plant. The consequences of the incident on the facilities were unclear.
Low Sulfur Gasoil futures, the benchmark for diesel in Northwest Europe, were $12.50/metric ton higher at $820.00/mt on Wednesday at 15.20 GMT, according to Intercontinental Exchange data. The Brent crude front month futures contract was up $1.45/bbl at $83.37/bbl.
Previously, on Tuesday, TASS had reported an attack at Lukoil's 320,000 b/d Norsi refinery in Nizhny Novgorod, around 450 kilometers east of Moscow.
According to sources, the attack damaged one of the refinery's two crude distillation units, meaning that at least half of its production capacity could be no longer operational.
Helge André Martinsen from DNB estimates that Ukraine has damaged facilities accounting for more than 10% of Russia's oil processing capacity in the past two days.
"Damages have not been quantified and the reaction in global distillate prices is moderate, so far. However, the increased number of attacks suggest a possible change in Ukrainian strategy, so more may be expected," said Ole-Rikard Hammer from Arctic Securities.
As the war enters its third year, Ukraine has been increasingly targeting Russia's oil and gas infrastructure, including refineries, export terminals and storage sites. Previous attacks in January and February hit the Ust Luga, Volgograd, Tuapse, Ilsky and Afipsky refineries.
The Russian government two weeks ago implemented a fresh ban on gasoline exports. This could be seen as a way to secure supply for the domestic market amid reduced refinery runs ahead of the presidential elections. It could also help the country comply with its OPEC+ commitments, which include both production and export cuts.
Despite the European Union halting oil imports from Russia, the country remains one of the largest exporters in the world. Russian companies have successfully found new buyers, with its crude oil cargoes now feeding refineries in China and India, and diesel exports redirected to Turkey, Africa and Latin America.
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
--Reporting by Jaime Llinares Taboada, jllinares@opisnet.com; Editing by Rob Sheridan, rsheridan@opisnet.com
(END) Dow Jones Newswires
March 13, 2024 11:39 ET (15:39 GMT)
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