Drones hammer Russian oil

Ukrainian drone strikes have knocked a large share of Russia’s oil export system offline, disrupting flows from Baltic and Black Sea ports in the biggest such shock of the war. (usnews.com) Reuters calculated on March 25 that about 40% of Russia’s crude export capacity, roughly 2 million barrels a day, had been halted after attacks on Primorsk, Ust-Luga and the Druzhba pipeline route. By April 2, industry sources told Reuters the outage had eased but still left about 20% of export capacity out of service, enough to force output cuts. (usnews.com 1) (usnews.com 2) The attacks have spread across Russia’s energy map. Reuters reported on April 8 that Lukoil’s NORSI refinery, Russia’s fourth-largest, suspended operations after an April 5 drone strike, while the Kirishi refinery halted processing at the end of March and the Saratov refinery shut a crude unit after a March 21 hit. (usnews.com) Russia’s export network matters because oil and gas bring in about a quarter of state budget revenue, and more than 80% of the country’s oil moves through the Transneft pipeline system, according to Reuters. When ports, pumping stations and refineries are hit at the same time, crude backs up inside the system and producers have fewer places to send it. (usnews.com 1) (usnews.com 2) Kyiv has said it is trying to cut the revenue Russia uses to fund the war. Moscow calls the strikes “terrorist attacks” and has tightened security around energy sites, Reuters reported. (usnews.com) The heaviest pressure has fallen on western export routes. Reuters reported that Ukraine hit all three of Russia’s main western oil outlets — Novorossiysk on the Black Sea and Primorsk and Ust-Luga on the Baltic — while Druzhba pipeline supplies through Ukraine to Hungary and Slovakia had already been suspended since January. (usnews.com 1) (usnews.com 2) The Black Sea route kept taking hits in April. Russia said on April 6 that drones damaged the Caspian Pipeline Consortium terminal near Novorossiysk, a site that handles about 1.5% of global oil supply, including oil from Kazakhstan. (usnews.com) A week later, Reuters reported that Rosneft was diverting crude to its Tuapse refinery after a drone strike heavily damaged Novorossiysk’s Sheskharis terminal, which handles roughly 14% of Russia’s crude exports. On April 20, another drone attack on Tuapse killed at least one person and sparked a fire at the port, according to Russian officials cited by Reuters. (globalbankingandfinance.com) (usnews.com) Russia still has eastern outlets to China and the Pacific port of Kozmino, and Reuters said those routes were continuing to load. But the recent strikes have turned oil terminals, refineries and pump stations into regular targets, leaving Moscow to reroute barrels, absorb outages and harden sites that were built for throughput, not air defense. (usnews.com)