Three industry sources have informed that the Russian oil pipeline monopoly Transneft has warned producers that the Ukrainian drone strikes may have to stop oil supplies, writes the news agency Reuters.
Meanwhile, Transneft has published a statement on its website that it is fake news and an information war by Western countries against Russia.
Kiev has intensified attacks on Russian energy industry facilities since August to reduce Moscow’s ability to continue the war in Ukraine and reduce the profits that the Kremlin makes from oil and gas trading.
Profits from oil and gas exports have made up between a third and a half of Russia’s total federal budget in the last decade, thus making the sector the main and most important source of government funding.
Ukrainian drones have attacked at least ten Russian oil refineries, reducing Russia’s refining capacity by almost a fifth.
The main Russian ports on the Baltic Sea coast, Ustl-uga and Primorsk, were also damaged. Russian authorities have not publicly commented on the extent of damage to production facilities and export capacity. However, two sources close to the industry told Reuters that Transneft, which controls more than 80% of Russia’s refined oil, had in recent days limited the company’s ability to store oil in pipelines. The company has also warned producers that it will accept less oil if its infrastructure is hit by further attacks.
The attacks could eventually force Russia to stop refining altogether. Transneft said the appearance of such fake news, which cites unnamed sources in Russian energy circles, was damaging the company’s public image.
Western countries have imposed a series of sanctions on Russia since its invasion of Ukraine, targeting the oil and natural gas sectors. However, Moscow has found ways to get oil to India and China, bypassing sanctions and using a shadow fleet in the Baltic Sea. In early September, Ukrainians attacked Primorsk, temporarily shutting down the port. Up to a million barrels of oil a day can be exported from Primorsk, more than 10% of Russia’s production. Ukrainian President Volodymyr Zelensky has said the strikes have caused significant damage, and attacks on Russian oil infrastructure are “the sanctions that work the fastest.”
Unlike OPEC’s top oil producer, Saudi Arabia, Russia has no storage capacity for large oil reserves.
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