In this four-part Energy Highlights series, Energy Economist Dominic Whittome analyses the pressures shaping global energy markets in 2025. This article focuses on the escalating refinery attacks within Russia, the resulting shortages in refined petroleum products, and the mounting risks to international supply.
Russian Crude & Refined Product Supply
The war in Ukraine has deteriorated, now regressing into an ‘energy assets bombardment’ with Ukraine attacking oil, petro-chemicals and gas transmission infrastructure across western Russia which is now stepping up its attacks on Ukraine’s power generation and transmission infrastructure. The extensive hits on refineries has already adversely affected the global supply balance of refined petroleum products of which Russia is a major player, notably to Asian and eastern countries who have hitherto defied sanctions or boycotts to date. The petroleum products market has already caused crack spreads to widen with risk premiums in jet-kerosene, diesel and heating oil rising to reflect the increased uncertainty.
Latest attacks on its oil, gas infrastructure, refineries and wider downstream assets, Russia is now importing emergency supplies of petroleum products from the same customers, namely China, North Korea, India and Belarus amid Moscow based Neftegaz just revising upwards its October Newsflash, now reporting that over 40% of the country’s primary refining capacity is already out of action. Russian refineries can process circa 330 million tons of oil (6.5 million barrels per day) of which 130 million (with all 16 refineries attacked) have been halted. Stock inventories are reckoned to be as high as 65 days (vs. typical EU average of 25 ), even it that will delay but not change the final impact on the refined products market affecting Western buyers, especially in heavier distillates which is exactly the fuel-type which will be in highest demand if Europe’s winter, which has recorded as a mild one to date, suddenly turns cold.
Dominic Whittome
Dominic Whittome is a energy consultant with a background in economics and econometrics. He has 28 years of experience in the industry principally in the supply, trading and corporate finance spheres. Serving as analyst, commercial manager and head of trading within EDF Energy, ENI UK and Mobil North Sea before he joined Prospect Law and has since specialised in energy purchasing; contract arbitration and commercial development of infrastructural and renewable power projects.
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