Russia's Crude Exports to Rise Amid Refinery Attacks — NRG-IA

Russia's crude oil exports through its three major western terminals are estimated to rise in August to approximately 2.7 million barrels per day , about 4% above the 2.6 million barrels per day in July . The increase comes at a time when repeated attacks on refineries are reducing the volume of oil the Russian industry can process, leaving additional volumes available for export. The estimate, reported by Reuters based on preliminary market data and information from traders, concerns exports through Primorsk and Ust-Luga on the Baltic Sea, and Novorossiysk on the Black Sea . The figure of 2.7 million barrels per day does not represent Russia's total crude oil exports: it excludes eastern maritime terminals and pipeline flows. However, the shift highlights a major change in the structure of Russian exports. When refineries can no longer process the same volumes of oil, a portion of the feedstock can be redirected to export terminals. Russia is thus sending more crude to foreign buyers while producing less gasoline, diesel, jet fuel, and other refined products. Less refining can mean more crude available for export The oil supply chain has two main outlets for extracted crude. It can either be sent to refineries to be processed into finished products, or transported directly to terminals and exported as raw material. When a refinery scales back processing, the oil destined for it must be redistributed. Some may be stored, some may be absorbed by other facilities, and some may end up exported if pipeline and terminal infrastructure have sufficient capacity. Traders cited by Reuters point to exactly this mechanism for August: attacks on refineries have reduced domestic processing capacity, making a larger volume of crude available for loading at western ports. However, this effect should not be automatically generalized to all attacks on oil infrastructure. If a refinery is affected, crude exports may rise. If ports, pipelines, or loading facilities are hit, Russia's capacity to move oil out of the country could decline. This distinction was also visible in July, when disruptions at Novorossiysk helped limit exports through western ports. For August, traders expect Primorsk, Ust-Luga, and Novorossiysk to operate close to available capacity. Russia exports the raw material its refineries no longer process Recent Russian trade data confirms this structural shift. The Centre for Research on Energy and Clean Air estimates that in June, exported volumes of crude oil rose by 14% compared to May , while seaborne loadings of oil products fell by 21% , reaching the lowest level in the organization's tracked data series. S&P Global identified the same trend: seaborne crude exports rose in June, while outbound shipments of refined products fell significantly. The two categories are not economically interchangeable. An exported barrel of crude represents the sale of raw material. Processing it in a refinery yields gasoline, diesel, jet fuel, marine fuel, and other products, keeping the industrial activity and value-added associated with refining within the Russian economy. Therefore, the increase in crude oil exports does not prove that attacks on refineries are ineffective. It may actually be the direct consequence of temporarily losing a portion of domestic processing capacity. More exported barrels do not automatically translate to higher revenues The gap between volume and revenue is equally important. According to CREA, Russia's exported crude volumes rose by 14% in June compared to the previous month, but revenues from this category fell by approximately 8% , to an estimated average of €348 million per day . The exported volume is only one of the variables determining Moscow's revenues. International oil prices, discounts on Russian grades, shipping and insurance costs, sanctions, and vessel availability all play a role. Consequently, rising volumes cannot be automatically translated into a financial advantage for Russia. Particularly since exporting crude instead of refining it domestically shifts a portion of the economic value of refining to the country that purchases and subsequently processes the raw material. Fuel becomes the domestic market's problem The pressure on refineries is also reflected in Moscow's fuel policy. At the end of July, the Russian government extended restrictions on exports of gasoline and certain fuel categories until January 31, 2027 , after repeated attacks on refineries contributed to regional shortages and rising domestic prices. The measures aim to keep larger volumes of fuel within Russia, including for agriculture and domestic consumers. The situation thus creates two flows moving in opposite directions. On one hand, Russia is trying to send more crude oil to foreign markets. On the other hand, it is protecting the domestic supply of refined products by restricting a portion of fuel exports. This combination is consistent with an oil economy that still has large volumes of raw…