OIES Suggest Less Severe Loss of Russian Refining in Q1 of 300kb/d

OIES estimates 300 kb/d of Russian crude processing and 5% of total Russian refining capacity was lost in Q1 24 on a gross basis suggesting less severe disruption than other estimates.

• Diesel output accounted for 26% of total disruptions on average and 5% of total Russian diesel supply by March.
• Critical equipment avoided the worst of the damage while Russia was swift to repair the damage and affected refineries adjusted scheduled maintenance timings. Refineries were also able to increase secondary units runs or use reserve capacity.
• Russian crude runs could recover close to a year ago levels during Q2 to end the quarter in-line with official targets but could remain under pressure if drone attacks resume at the intensity seen in March.
• Russian supply data suggested minimal impact on crude production and processing, or on crude and products exports in Q1.
• Deeper voluntary crude production cuts in Q2 should limit the export of any unprocessed crude.
• Global middle distillate markets could cope with a 10-12% decline in Russian product exports in Q2 on a quarterly basis but renewed attacks could maintain concerns as diesel stocks decline and seasonal demand strengthens.