Diesel production in Russia fell by about 10% in May, after a roughly similar monthly decline in April, according to a Reuters analysis of data.
According to the agency, increased Ukrainian drone attacks on refineries have forced some facilities to reduce or completely stop operation. Despite lower production, fuel exports have increased.
Kiev has been systematically attacking Russia’s energy infrastructure in an attempt to cut its oil and gas revenues, which are financing its war in Ukraine.
Russia has so far sought to maintain lucrative diesel exports, but the period is crucial for domestic demand from the agricultural sector. Interfax news agency reported on Tuesday that the government was considering a ban on exports, but industry sources said such a measure was unlikely because it would complicate the work of refineries.
Refineries affected by drone attacks reduced diesel production by up to 1 million metric tons in April and by another 600,000 tons in May, according to Reuters calculations. March production was about 7.5 million tonnes.
Meanwhile, seaborne exports of diesel and gasoil from Russia rose 8% to about 3.25 million tonnes in April from March, staying close to 3.3 million tonnes a year earlier, market sources and LSEG data showed. Exports remained steady in May.
The production decline potentially limits Russia’s ability to benefit from rising oil prices linked to the Iran conflict and the subsequent disruptions to the energy market after the closure of the Strait of Hormuz.