Year Low After Ukrainian Drone Strikes – Bloomberg

Key Points:

• Russian oil refining in July dropped to its lowest level since May 2002, processing about 3.6 million barrels per day, roughly one-third below the seasonal norm, due to intensified Ukrainian drone attacks on refineries and energy infrastructure.
• Seventeen refineries, five large tankers, five port infrastructure sites, and two pipelines were targeted in July, marking the second-highest number of attacks on Russian oil assets, with the Omsk refinery among the key targets.
• The Caspian Pipeline Consortium (CPC) terminal halted oil loading after attacks on eight linked tankers, though Kazakhstan’s Energy Ministry denied reports of a complete CPC shutdown; the consortium includes Russian, Kazakh, and international companies like Chevron and ExxonMobil.
• Analysts note that Russia's ability to compensate for disruptions by redirecting crude to alternative ports is limited by pipeline, storage, and tanker capacity, while efforts to bolster air defenses may reduce but not eliminate drone threats.
• The ongoing drone campaign’s impact on Russian oil refining and exports depends on Ukraine’s drone resources and target choices, with attacks shifting focus between refineries and tankers throughout July.