Russia's diesel output falls a further 10% in May after drone attacks, data analysis shows
Impact of Drone Attacks on Russian Diesel Production and Exports
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Diesel Production Declines
MOSCOW, May 29 (Reuters) - The production of diesel in Russia fell by around 10% in May, adding to a 10% monthly drop in April as Ukrainian drone attacks on refineries forced them to reduce or halt output, Reuters data analysis showed on Friday, while exports of the fuel rose.
Ukrainian Drone Attacks on Refineries
Kyiv has targeted Russia's energy infrastructure as it seeks to reduce Moscow's earnings from oil and gas that it can use to finance its war with Ukraine.
Government Response and Export Ban Considerations
Russia has so far focused on maintaining lucrative exports of diesel, but it is a time of year when demand from farmers is high and the Interfax news agency reported on Tuesday, the government was considering an export ban.
Industry Sources on Export Ban
Some industry sources said a ban was unlikely as restrictions would further complicate the refineries' operations.
Production and Export Figures
Monthly Output Changes
Refineries hit by drones reduced their diesel output by up to 1 metric million metric tons in April and by up to a further 600,000 tons in May, Reuters calculations showed.
According to industry sources, diesel production was at 7.5 million tons in March.
Export Trends
Russia's seaborne diesel and gasoil exports rose 8% to around 3.25 million metric tons in April from March, however, down only slightly from 3.3 million tons the same month a year ago, data from market sources and LSEG showed earlier this month.
Exports have held steady in May, according to the data.
Broader Market Implications
Impact on Russia's Oil Revenue
The reduced output as a result of the drone attacks is potentially limiting Russia's ability to benefit from a surge in oil prices linked to the Iran war, which has led to unprecedented energy market disruption because of the effective closure of the Strait of Hormuz.
Geopolitical Context
The Iran war, begun at the end of February by U.S.-Israeli airstrikes, has distracted Washington from its efforts to broker an end to the Ukraine war.
(Reporting by ReutersEditing by Barbara Lewis)
