Ukraine Hits Another Russian Refinery as Fuel Crunch Worsens

Ukraine is intensifying its drone attacks on Russian refineries, contributing to a worsening fuel crisis in Russia and tightening global fuel markets. On Monday night, Ukrainian forces targeted the Afipsky refinery, an 180,000-barrel per day facility in the Krasnodar region, causing a fire and damaging at least 10 homes in the nearby village. Drone debris also killed two people at the local railway station, according to the Krasnodar region governor, Veniamin Kondratiev.

The Afipsky refinery, owned by ForteInvest, has been a frequent target of Ukrainian strikes. The most recent attack occurred last month as Ukraine escalates its efforts to diminish domestic fuel supply in Russia. Russia has been grappling with a gasoline and diesel shortage since the spring, following Ukraine's intensified drone attacks on refineries in an attempt to cripple fuel supply to the front lines and the domestic Russian market.

Russian Deputy Prime Minister Alexander Novak, responsible for energy matters, including Russia's OPEC talks, attempted to quell concerns on Monday. He stated that some oil refineries in Russia have restarted operations following repairs, which could soon boost domestic supply. However, Russia continues to struggle with fuel rationing in many regions, gas stations in major cities running out of fuel, and long queues at numerous gas stations.

Russia's diesel and gasoil exports have plummeted to their lowest levels in years this month, as Moscow extends restrictions on diesel exports amid the fuel crisis. The scarcity of Russian diesel further exacerbates the global middle distillate market amid ongoing supply disruptions from the Middle East.