Russian Emergencies Ministry/Reuters
- Ukrainian drone attacks have disrupted Russia's oil refining and export capacity, analysts said.
- One CEO estimated Russia's daily oil-refining capacity has been knocked by about 600,000 barrels.
- The drone strikes also led to an increase in crude oil prices, adding $2-$3 per barrel of risk premium last week.
Ukrainian drone attacks are adding pressure on Russia's oil refining capacity and exports, and it will be "several weeks, if not months" before refining returns to normal, one industry insider said, according to Bloomberg.
Speaking at an energy conference on Monday, Gunvor Group CEO Torbjörn Törnqvist said that about 600,000 barrels of Russia's daily oil-refining capacity had been affected by Ukrainian drone strikes.
"It is significant because obviously this is gonna hit the distillate exports straight away," Törnqvist said, according to the outlet, with the likely upshot a reduction in exports of about 200,000 barrels.
JPMorgan Chase & Co estimated that the strikes knocked out about 900,000 barrels a day of oil refining capacity in Russia, the outlet reported.
Ukraine has kept up a steady campaign of drone strikes on Russian energy facilities in recent weeks.
On Saturday, it sent a wave of 35 drones, starting fires and causing electricity disruption as part of a series of attacks seemingly aimed at coinciding with Russia's presidential election.
A Reuters analysis estimated that, in the first quarter, attacks on Russian facilities halted about 7% of its refining capacity, causing global prices to creep up.
"The strikes on Russian refineries added $2-$3 per barrel of risk premium to crude last week, which remains in place as we start this week with more attacks over the weekend," oil market analyst Vandana Hari told Reuters.
But Russia will increase its oil exports through its western ports by almost 200,000 barrels per day, or roughly 10% in March, against a backdrop of the strikes, Reuters reported.
"Oil refineries are unbelievably vulnerable," Mikhail Krutikhin, an independent Russian energy analyst, told The Wall Street Journal about the attacks. "Ukrainian drone attacks can be very efficient, and they will certainly be continued and expanded."