Russian Oil Refining Volumes May Drop to Multi-Year Low in August

Russian oil refineries may reduce processing volumes to 4 million barrels per day in August, according to an analysis by Kpler. If confirmed, this figure would mark a new multi-year low, following a brief increase to 4.2 million barrels per day in July.

The decline is attributed to unplanned equipment repairs and production downtime. A drop to 4 million barrels per day represents a nearly 5% decrease from July and a 2.5% decline compared to June, when processing stood at 4.1 million barrels per day—a previous multi-year minimum.

Production Thresholds and Supply Risks

Industry sources estimate actual August refining volumes between 3.8 million and 4.1 million barrels per day. While projections suggest a recovery to 4-4.3 million barrels per day in September, returning to previous levels of 5.3-5.5 million barrels per day by 2026 is considered unlikely.

The sector faces a critical threshold of 3.3-3.5 million barrels per day; below this level, supplying the domestic market becomes difficult. Gasoline shortages are most acute—in early July, production covered only 70% of seasonal demand, necessitating imports.

Regional Disruptions and State Intervention

Production drops have triggered local fuel shortages. In early August, the Lipetsk and Orenburg regions introduced gasoline sale restrictions—including a "odd-even" system and a 30-liter limit per vehicle—while authorities in Sochi recommended limiting private car use due to gas station shortages.

To stabilize the market, the government has implemented several measures:

• Extended the reduced mandatory exchange sales quota for gasoline (10%) through the end of 2026.
• Permitted the production and sale of Euro-2, Euro-3, and Euro-4 gasoline until July 1, 2027.
• Suspended weight and size controls for fuel tank trucks until the end of 2026.

Deputy Prime Minister Alexander Novak has instructed relevant agencies and oil companies to ensure uninterrupted delivery of petroleum products and monitor price dynamics.

External Factors and Outlook

The table illustrates how domestic technical failures align with broader global trends and export policies to constrain output. The planned removal of the diesel export ban in September may incentivize refinery activity, potentially returning gasoil and diesel exports to July levels of at least 400,000 barrels per day. However, full recovery remains dependent on the completion schedule of equipment repairs.

Source: This article was adapted from an original Russian-language publication by Pravda.Ru.