Russian refineries are expected to reduce oil processing in August to 4 million barrels per day, the result of unplanned repairs and shutdowns, writes the Kremlin-aligned business newspaper Kommersant, citing a forecast by the analytics firm Kpler. The forecast falls nearly 5% below July’s 4.2 million barrels per day and about 2.5% below that of June, when refinery runs had already fallen to a multiyear low of 4.1 million barrels per day.
An industry source told the newspaper that Russian refineries were expected to process between 3.8 million and 4.1 million barrels per day in August. In September, the figure could rise to between 4 million and 4.3 million barrels per day, but the industry will not return to its usual level of 5.3 million to 5.5 million barrels per day for the foreseeable future. According to Kommersant’s source, if processing falls below a level of 3.3 million and 3.5 million barrels per day, then supplying the domestic fuel market becomes extremely difficult.
The Russian gasoline market remains sensitive to production cuts. Again according to Kommersant, as of early July Russian refineries were producing only about 70% of the gasoline needed during the seasonal demand period, forcing authorities to arrange imports. At the time, Kpler had forecast that refinery runs would rise to as high as 5 million barrels per day in July by September, but it lowered that estimate after new shutdowns.
