Russia Turns to South Korea for Fuel as Refinery Crisis Deepens

Russia is increasingly relying on South Korea for fuel as its refinery crisis deepens. According to Reuters, the country imported approximately 30,000 metric tons of fuels from South Korea to combat supply constraints caused by ongoing Ukrainian drone attacks on refineries. At least two short-range tankers carrying the fuels were loaded in South Korea and dispatched to Russia's Far East. One tanker has already reached its destination, as shown by ship-tracking data from Kpler and Vortexa.

Bloomberg reported that Russian refineries' throughput declined to the lowest level since 2002, with a monthly output of 3.6 million barrels daily, which is over 30% below the seasonal average. Meanwhile, crude oil production in Russia is on the rise, with the July average reaching over 9 million barrels daily, according to unnamed sources. This increase is attributed to the reopening of previously struck refineries and a reduction in shortages.

However, Ukrainian attacks persist, with President Zelensky stating that another two facilities were targeted in "long-range" strikes deep inside Russia. This has led to Russia imposing a ban on diesel fuel exports, which is set to extend until the end of the year. Consequently, global diesel fuel supply is becoming even tighter, particularly for Europe.

Russia has also placed restrictions on gasoline exports to serve the domestic market. The Ukrainian attacks have disrupted Kazakh oil supply through the Caspian Pipeline Consortium, terminating at Russia's Black Sea port of Novorossiysk. In response, Kazakhstan has reduced its oil production by around 50% last month.