Russia’s oil exports slump as Ukraine drone strikes hammer production infrastructure

Russia’s oil machine is breaking down, and Ukraine’s drone fleet is holding the wrench. A sustained campaign of long-range drone strikes against Russian refineries, ports, and storage facilities has carved deep into the country’s ability to process and export crude, with secondary oil processing capacity falling by an estimated 1.2 to 1.3 million barrels per day year-over-year by May. The damage has forced Russia to cut crude production by roughly 300,000 to 400,000 barrels per day as of April, pushing total output down to 9.009 million bpd by May. That marks six consecutive months of declining production. The paradox of broken refineries When refineries go offline, the crude that would normally flow into them has to go somewhere. In Russia’s case, it went to export terminals. Western-port oil loadings actually surged to 2.5 million bpd in May, a 15% jump from the prior month and the highest level in eight months. Crude that couldn’t be refined domestically was simply shipped abroad instead. Projections point to a sharp reversal, with shipments expected to drop to roughly 1.7 million bpd in June. Russia also appears to be redirecting some crude back toward domestic refining in an e...