Drone strikes trigger early drop in Russian crude runs ahead of autumn maintenance season

August saw the most severe wave of Ukrainian drone strikes on Russian energy infrastructure since mid-2022, with up to 10 refineries hit. Facilities accounting for over 1.5 Mbd of capacity were affected, triggering a sharp, multi-week drop in throughput. Preliminary estimates point to a 400–500 kbd decline in crude runs for the month. While repairs are underway, past patterns suggest lasting impacts into October, compounding domestic product tightness and export risks.

Market & trading calls

• Bearish on Russian crude runs through September as drone strikes delay restarts.
• Bullish gasoil cracks in short term amid tighter balances and falling Russian exports.

Following a Q2 lull, Ukrainian drone strikes surged in August, disrupting over 20% of Russia’s refining capacity. While not all affected units went fully offline, reduced utilization and staggered restarts pushed crude runs to 5.1 Mbd, a 200 kbd drop from July and 450 kbd lower year-on-year. This counter-seasonal decline during what is typically Russia’s summer demand peak was further amplified by scheduled maintenance.

Russian Refinery Outages

Source: IIR, Kpler

The strategic targeting of western Russian refineries, many close to the Ukrainian border has introduced new volatility into regional product balances. Damage was not limited to refineries; critical infrastructure, including the Ust-Luga gas processing facility and the Druzhba pipeline, also sustained hits. Although exports through Druzhba reportedly resumed, the disruption adds to market concerns over logistics fragility and operational continuity.

The outages prompted a downward revision to our refined product supply outlook, with gasoline output cut by 85 kbd and middle distillates by 185 kbd in August. Domestic shortages (gasoline) are already materializing, particularly in the Far East and southern Russia, despite stable export volumes to date. However, with export quotas under review and internal supply under strain, the likelihood of reduced refined product exports—especially light and Middle distillate products—is increasing. This downward revision may widen as more data emerges. However, we believe the drop was partially cushioned by higher run rates at unaffected refineries. This was driven by strong government pressure to maintain fuel supply during peak summer demand. With refining operations curtailed, crude barrels will move to export channels. Seaborne flows could rebound to 3.6 mbd in September, barring rapid refinery repairs.

Russian Refinery runs

Source: Kpler

Crude runs are expected to remain muted in September at around 5.2 Mbd (revised from 5.4 Mbd), as major plants such as the Moscow, Ukhta,  and Novokuibyshevsk refineries enter maintenance, partly offset by the return of the Kuibyshev. The downward revision in September runs reduced our supply outlook, with gasoline output cut by 40 kbd and middle distillates by 85 kbd. We have consequently revised our 2025 crude run forecast to 5.28–5.3 Mbd, down 60–65 kbd from prior estimates and 2024 levels, incorporating the combined impact of August’s unplanned outages, reduced September activity, and ongoing turnarounds. While a gradual recovery is anticipated in Q4, prolonged outages and elevated drone strike risks continue to cloud the outlook.

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