Ukrainian drones have knocked out nearly a third of Russia's refining, Reuters reports: nine of 35 plants hit
Reuters says attacks since late October disrupted refineries holding about 30% of Russian capacity, just as Moscow tries to ship diesel under a deal with Washington. Here is what is confirmed, what is not, and what it means for diesel, oil and airlines.
Ukrainian drone strikes have disrupted Russian refineries representing roughly 30% of the country's oil-processing capacity since late October, Reuters reported Tuesday in an exclusive citing sources. We could not load the full Reuters text, so the detail below comes from OilPrice.com's account of the report. The figures are Reuters' sources' estimates, not an official Russian or Ukrainian count.
What the report says
According to OilPrice's summary, nine of Russia's 35 major refineries were disrupted over the past week, with a combined nameplate capacity of about 2.2 million barrels a day against roughly 6.8 million barrels a day nationally. Our arithmetic: 2.2 divided by 6.8 is about 32%, in line with the "roughly 30%" headline. Industry estimates put the real loss of crude processing at up to about 1.5 million barrels a day, from around 5 million barrels a day at the end of October.
Nameplate capacity is not lost output. A refinery that is damaged may run at partial rates, and the report itself separates the two figures.
Kirishi: the confirmed strike
One strike in this wave is confirmed by an independent outlet. Radio Free Europe/Radio Liberty reported that a Ukrainian drone attack started a fire on Nov. 9 at the Kirishi refinery near St. Petersburg, Russia's second largest, according to Leningrad Governor Aleksandr Drozdenko. He said the fire was contained and that a woman was killed by falling debris. RFE/RL describes the plant as processing up to 20 million tons of crude a year and says it has been hit before. The Financial Times separately ran a headline on Nov. 9 saying Russia is rationing petrol after the new strikes; we saw the headline only and have not confirmed its detail.
The diesel deal
OilPrice says the strikes land as Russia tries to raise diesel exports under an arrangement President Trump announced in October, with an initial 300,000 metric tons and further scheduled shipments. It adds that Foreign Minister Sergei Lavrov said Tuesday the arrangement is already helping lower fuel prices, while shortages have reportedly returned to several Russian regions. We have not independently verified the terms of the arrangement. Reuters also ran a headline Tuesday about a tanker carrying Russian diesel halting off the U.S. coast; we have not read that story and draw no conclusion from it.
The strikes arrive as US, Russian and Ukrainian officials meet in Abu Dhabi, covered in our report on day one of the talks. Ukraine has not said the strikes will pause during negotiations, and we found no statement that they will.
What it means
| Market | Level, about 1 p.m. ET Nov. 10 | Move |
|---|---|---|
| Brent (front month) | $91.98 | Down 0.6% from Monday's $92.57; Friday $98.32 |
| WTI (front month) | $86.45 | Down 0.5% from Monday's $86.85; Friday $90.83 |
| Heating oil (ULSD) | $4.12 a gallon | Down 2.2% from Monday's $4.21 |
| Defense ETF (ITA) | $72.13 | Up 0.6% from Monday's $71.67 |
| Airlines ETF (JETS) | $30.01 | Down 0.6% from Monday's $30.20 |
Prices from Yahoo Finance futures and ETF data, read at about 1 p.m. ET. Percentages are our arithmetic.
Oil and diesel. Crude and diesel futures were lower on the day despite the report, while traders were also pricing Iran de-escalation (see Brent under $90). Russian refinery outages hit products more than crude. Less Russian diesel and fuel oil is a tighter diesel market, while less Russian refining can leave more crude to export, which pulls the other way. OilPrice notes that Middle East refinery outages from the Iran war already restrict refined-product supply.
Shipping and insurance. The report does not say refinery strikes have changed Black Sea or Baltic shipping risk, and we found no new war-risk premium announcement today.
Airlines and airspace. Jet fuel is a refined product, so a prolonged Russian outage matters mostly through the global distillate price. The heating oil chart above shows that price still 21.7% below its Sept. 15 peak.
Defense stocks. ITA is at $72.13, up 4.6% from Friday's $68.98 close. We have no evidence that this report drove that move.
US consumers and truckers. Diesel is what trucks, farms and delivery vans burn. Gasoline just fell below $4; a sustained Russian outage is a risk to that price, though ULSD futures are lower today. Watch ULSD futures rather than headlines.
More: Tuesday's War Room brief, crude oil chart, War Room.
Sources: Reuters (exclusive, via OilPrice.com), OilPrice.com, RFE/RL, Yahoo Finance. Claims of strikes and casualties are attributed to the officials and outlets named. This is market information, not investment advice.
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