MOSCOW, July 7 — Russian crude oil exports are running at elevated volumes as Ukrainian drone strikes on domestic refineries continue to suppress processing capacity, according to data from the International Energy Agency and the US Energy Information Administration. The numbers tell a clear story. Russian oil exports averaged 7.5 million barrels per day in 2023, with refined products such as diesel and gasoline making up roughly 2.5 million barrels per day of that total.
But Ukrainian drone strikes on refinery infrastructure have disrupted processing capacity, forcing Moscow to export more crude oil in place of higher-value refined products. In the first half of 2024, Russian refinery runs fell by 7% compared to the same period in 2023, according to the International Energy Agency.
The Omsk strike, while not causing a major supply halt, adds to cumulative pressure on a system already under strain. The result has been a global diesel supply squeeze, with European diesel futures rising 12% between January and September 2024. The US Energy Information Administration noted in its August 2024 Short-Term Energy Outlook that Russian refinery outages could keep global oil prices elevated.
The EIA projected Brent crude averaging $85 per barrel in 2024, up from $82 in 2023.
Strategic context for Moscow
For the Kremlin, the dynamic presents a difficult trade-off. Crude oil exports generate revenue, but refined products command significantly higher prices on international markets. Every barrel of crude that leaves Russian ports instead of diesel or gasoline represents lost value-added income for state coffers already stretched by war expenditure and Western sanctions.
The shift toward crude exports also reshapes global trade flows. European buyers, who previously took substantial volumes of Russian diesel, have largely redirected purchases to Middle Eastern and Asian refiners.
Russian crude, meanwhile, finds ready buyers in India and China, where refining capacity remains ample. But the cumulative effect of repeated drone strikes on Russian refinery infrastructure is now measurable in market prices. The 12% rise in European diesel futures reflects a tightening of supply that the IEA attributes in part to reduced Russian processing capacity.
What to watch next
The trajectory of global oil prices in the second half of 2024 will depend heavily on whether Russian refineries can restore damaged capacity faster than Ukrainian forces can disrupt it. The EIA’s forecast of $85 Brent assumes continued constraints on Russian processing, but any acceleration in repair work or a shift in Ukrainian targeting priorities could alter that outlook. For European consumers and industrial users, the key variable remains diesel supply.
With Russian refinery runs down 7% year-on-year in the first half of 2024, the diesel squeeze that pushed futures up 12% shows no immediate sign of easing. The Omsk strike, while minor in isolation, fits a pattern of cumulative pressure that market participants will watch closely in the months ahead.
