Ukrainian Strikes Cripple Russia's Oil Exports

Russia's oil exports have been severely impacted by Ukrainian strikes on refineries and Black Sea ports, leading to a significant decline in seaborne shipments. According to recent data, average seaborne shipments of Russian crude oil fell to 3.46 million barrels a day in the four weeks leading up to August 23.

This decline has been exacerbated by shutdowns at Russian refineries, which had previously left more crude available for export. However, this effect has now been offset by a decline in shipments from the Black Sea following attacks on oil tankers.

Moscow was forced to redirect Kazakh oil to Novorossiysk, freeing up capacity for Russian crude at the Baltic port of Ust-Luga, which is considered less vulnerable to Ukrainian attacks. Meanwhile, strikes on oil and gas processing facilities have reduced fuel production and exacerbated shortages on the domestic market.

Kremlin bans on exports of petrol, diesel, and aviation fuel are further restricting oil revenues for the Russian budget. Russia's crude oil production has also been affected, with OPEC secondary-source estimates showing that the country produced 8.887 million barrels per day in July, the lowest level in six years and almost 1 million barrels a day below its permitted level under the OPEC+ agreement.