IEA warns Russia’s oil refining capacity is under growing pressure

15:15

By: Azzat Manal

IEA warns Russia’s oil refining capacity is under growing pressure

Russia’s oil refining industry is facing growing pressure as Ukrainian drone attacks and Western sanctions increasingly complicate the operation, maintenance and repair of refineries, according to the International Energy Agency (IEA).

In its latest monthly assessment, the Paris-based agency lowered its baseline estimate for the amount of crude oil Russia could process over the next 18 months to around 4 million barrels per day. The projected level would be roughly 30% below the volumes processed by Russian refineries before the war in Ukraine.

The IEA said the challenges facing Russia’s refining sector extend beyond physical damage caused by repeated drone strikes. Refineries are also struggling to secure specialized equipment, spare parts and technologies needed to restore damaged facilities and carry out regular maintenance.

Western sanctions targeting Russia’s energy industry have restricted access to a range of foreign technologies and industrial components. This has made repairs more complicated and could lengthen the time required for affected facilities to return to normal operations.

The agency also cautioned that its current estimate may not fully capture the extent of the difficulties facing Russia’s refining network. Assessing the precise scale of damage and determining how quickly individual refineries can recover their processing capacity remain challenging.

Longer delivery times for replacement components could add further pressure on refinery operators. Seasonal factors may also complicate maintenance and operations as colder weather approaches, potentially increasing logistical and technical challenges for the industry.

Russia has one of the world’s largest refining networks, making refinery disruptions significant not only for domestic fuel supplies but also for the country’s ability to process crude into gasoline, diesel, jet fuel and other petroleum products. Sustained reductions in refining capacity could therefore affect domestic fuel markets as well as Russia’s broader energy revenues.

The situation also illustrates how military attacks and economic restrictions can reinforce each other. While drone strikes can directly damage infrastructure, sanctions can make it more difficult and costly to obtain the equipment required to repair that infrastructure, potentially prolonging disruptions.

The outlook for Russia’s refining sector will consequently depend on several factors, including the scale of future attacks, the availability of spare parts and equipment, the effectiveness of repair efforts and Moscow’s ability to maintain refinery operations despite logistical and technological constraints.