Russia may be forced to reduce oil production after a fresh wave of Ukrainian drone strikes disrupted export terminals and refineries. Pipeline operator Transneft has warned producers that storage constraints and reduced intake capacity are possible if further damage occurs. The assessment follows intensified Ukrainian attacks since August that have periodically knocked out processing units and logistics at key sites.
Last week’s strike on Primorsk — Russia’s largest western oil terminal — was the first known hit on the port since the start of the full-scale war and briefly halted loadings before a limited restart. Primorsk can load about 1 million barrels per day (bpd) of crude, making it central to exports of Urals grade and diesel from the Baltic. Russia’s other Baltic hub, Ust-Luga, is expected to operate at roughly half capacity in September following August infrastructure damage, further tightening export options in the northwest.
On the refining side, the Kirishi complex near St Petersburg — one of Russia’s largest plants — suffered a drone-related fire at the weekend; regional authorities said it was extinguished, while industry sources reported a key processing unit was subsequently taken offline. Earlier this month, Ukraine also said it targeted Rosneft’s Ryazan refinery, which had already halved throughput in August after previous strikes. Separately, Ukrainian officials reported an overnight attack on 16 September against the Saratov refinery.
Transneft’s indication to producers highlights a structural vulnerability: Russia has limited capacity to stockpile unprocessed crude when refining and export outlets are constrained. Reuters’ sources say the operator has already curbed firms’ ability to use its system for storage and could take less oil if damage persists. However, Transneft publicly rejected reports of imminent “radical” intake restrictions, calling them “fake”.
Oil markets responded cautiously. Brent crude edged higher on Tuesday, with traders weighing the risk that logistical bottlenecks in Russia — a supplier of a little over 10% of global output — could tighten seaborne supplies. Analysts at J.P. Morgan and Goldman Sachs noted that recent attacks have removed significant refining capacity at times, supporting prices even as demand concerns linger. Price action remained measured, with Brent in the high-$60s per barrel range during European trade.
The operational picture is mixed. Russia revised up its September loading plan from western ports by 11% earlier this month after refinery outages “freed up” crude that would otherwise have been processed domestically — an adjustment that illustrates how damage to plants can, in the short term, boost exports if terminals remain available. The subsequent hits on Primorsk and continuing constraints at Ust-Luga, however, limit that outlet.
Strategically, the stakes are significant. Oil-related revenues account for a large share of Russia’s federal budget, and any sustained reduction in export volumes or prolonged downtime at major refineries would weigh on fiscal receipts. Reuters’ sources and market analysts currently anticipate modest production declines driven by infrastructure bottlenecks rather than demand loss, as Asian buyers continue to take discounted crude. Even so, repeated disruptions to Primorsk and Ust-Luga would add costs and delays, with potential knock-ons for freight, insurance and quality segregation.
For Ukraine, the pattern of strikes signals a clear focus on energy infrastructure after months of targeting refineries, depots and, increasingly, ports handling crude and products. Kyiv argues that constraining Russia’s capacity to process and export hydrocarbons reduces funds available for the war. `
Image source: vostokbunker.com
