THE BIG QUESTIONS AS UKRAINE HITS RUSSIA REFINERIES
▶ As Kyiv drones and missiles prove Russian vulnerability, worries about impact on global energy emerge
People who live in glass houses shouldn’t throw stones, as the saying goes. Having waged a missile and drone campaign against Ukraine’s electricity supply and heating plants from the outset of the war in February 2022, Russia now finds its oil refineries under attack.
When the Norsi refinery on the Volga River, east of Moscow, cut operations in January, owner Lukoil gave little explanation. Also in January, the Tuapse refinery, located near the Black Sea, and the Ust-Luga facility, a Baltic Sea export terminal near Saint Petersburg, were damaged.
After an explosion on Tuesday, authorities admitted that drones had hit Norsi, which produces 11 per cent of Russia’s petrol, putting half of its capacity out of action.
The Kirishi plant, run by Surgutneftegaz, has also been hit several times this month. Ryazan, south-east of Moscow, was damaged on Wednesday, although it continues to operate partially. On Saturday, the Syzran and Novokuibyshev refineries in the Samara region of south-eastern European Russia came under attack.
Ukrainian drones have now hit 13 Russian refineries since the start of the year. Some sites are reported to have been repaired, but, including Syzran, more than 500,000 barrels per day has been damaged, a 10th of Russian capacity.
Russian refining throughput has hovered between 5.5 million bpd and 5.9 million bpd over the past decade, or about half of its oil production.
About two million bpd of refinery output goes to exports, the rest being consumed at home.
Of these exports, most is diesel, fuel oil and naphtha (a light petroleum liquid mostly used in petrochemicals or as input to petrol). Even prewar, Russia exported little motor petrol (gasoline), and already banned its export in February.
The appeal of such attacks to Ukraine are clear. Refineries are large, fragile facilities full of flammable liquids and gases, which are easy to disrupt. Few civilians are likely to be killed.
The loss of refining capacity doesn’t prevent Russia from exporting crude oil, therefore, it limits diplomatic pressure on Kyiv from countries that might object to a spike in oil prices.
The Russian system is designed to export refined products, not to import them.
Financial barriers and sanctions will make it difficult for Russia to source technically sophisticated spare parts. The attacks, therefore, may disrupt fuel supplies within the country, cost it money and divert air defences.
Russia’s refining capacity is concentrated in the western part of the country, where most of its population and industry resides. Having struck as far north as Saint Petersburg, the Ukrainians have shown they can hit almost any refinery west of the Urals.
Eighteen refineries are within this range, holding 3.5 million bpd of capacity.
The Ufa complex, east of Samara, might be out of the 1,000km range of the latest Ukrainian drones – for now.
Russia has made battlefield advances in recent months, albeit at a high cost of lives. Ukraine’s stocks of artillery ammunition have run low. US Republicans are blocking a further package of military support, and a victory in November’s presidential election for Donald Trump would bring to power a president friendlier to the Kremlin.
On the other hand, Russia’s Black Sea fleet has been attacked or confined to port by drone and missile attacks. It has lost warplanes, including airborne radar. If Kyiv comes under pressure from its western supporters to negotiate an unwanted ceasefire, or if its military situation deteriorates, it could increase its attacks on Russia’s petroleum sector.
The main Russian oil and gasfields are in West Siberia, a long way from Ukraine.
However, Ukraine has other options. For instance, it could target oil export terminals, with those around Novorossiysk on the Black Sea particularly vulnerable. It could hit pumping and compressor stations along oil and gas pipelines. Or, it could emulate Houthi forces in Yemen and strike tankers originating from Russia, perhaps using its new naval drones.
It hit oil and chemical tankers in the Black Sea with maritime drones in August, but does not seem to have repeated that approach – for now.
Such a shift in strategy would spread the impact of the conflict to international oil and gas consumers. It would be a diplomatically risky move, but understandable in extremis.
Ukraine’s use of drones expands a threatening trend for energy infrastructure, as I noted in October. In the Second World War, then in the Iran-Iraq War from 1980 to 1988, oil facilities were bombed. But bombers and missiles were expensive, inaccurate and vulnerable to being shot down.
Iran’s attacks on the giant Abqaiq oil processing facility in Saudi Arabia in September 2019 changed that. Drones and guided missiles hit with great – and in this case, non-lethal – precision, putting the plant out of action without wrecking it. Subsequent strikes by Iran or its allied groups on gas operations in the Kurdistan region of Iraq have been calibrated as political warnings.
The Houthis have used both drones and missiles against shipping in the Red Sea.
In the latest special refinery operations, Ukrainian drones were shot down by Russian air defences, but enough got through to damage their targets.
Their payloads are small, not enough to cause devastation, but they can be guided to vulnerable spots such as gas compressors that take months to repair or two years to replace.
Attacking refineries won’t bring Russia’s economy or war machine to its knees.
But it could bring domestic fuel shortages and spill over into international markets. Most importantly, it gives Kyiv leverage, less against Moscow but more with western friends.
Domestic fuel shortages in Russia could spill over into international markets, shaping the nature of conflict