The Kremlin may be forced to reduce its oil output in the future months as U.S. sanctions deter its ability to ship oil to Asia and Ukrainian drone incursions limp its refineries.
Washington imposed sanctions that affected 180 Russian tankers. At the same time, Ukraine has intensified drone attacks to enhance its bargaining standing amid anticipations that U.S. President Donald Trump will push Russian leader Vladimir Putin to mediate a settlement to the fighting in Ukraine. Trump has stated preventing the conflict is a focus and that he could inflict new sanctions on Moscow if his plans are not achieved.
As reported by Reuters, oil executives have expressed that there is a rising glut of crude in Moscow due to declining exports and decreased refining production, which can only be handled by reducing output. Russia has a small storage capacity, and Kyiv has struck some of these installations with drones in recent weeks.
Crude exports are already showing signs of weakness in trading data. Shipments from Russia’s western ports of Primorsk, Ust-Luga, and Novorossiisk in January were reduced by 17% from a year before.
Moscow no longer publishes its export data. Over the past three years, Russia has withstood waves of sanctions, including the G7 setting a $60 per barrel price cap on its oil sales. U.S. sanctions have not sought to prevent Russian exports but to cap the cost at which Russia can trade and to ensure it yields with the regulations. Russia’s daily output of about 9 million barrels, already well down from a record 11.25 million acquired in 2019, includes about 5 million bpd earmarked for its refineries.
However, there has been a peak in the number of Ukrainian drone raids since January, which have shot eight Russian refineries as well as oil stations and industrial areas. The episodes have crippled about 10% of Russian refining capability.
Major sites, including the Volgograd, Ryazan and Astrakhan refineries, have stopped producing fuel products, and there will be a delay in restoring them, expressed industry sources familiar with the plant’s functions.
Kyiv also struck Russia’s limited oil hold as well as channels and pumping stations, halting flows to export docks and refineries in January, traders stated. One of Russia’s biggest ports, Ust-Luga on the Baltic Sea, inscribed loadings to a four-year low in January, operating only half its capability, traders stated, citing issues with pipelines.
List of UAE based Companies helping Russia evading sanctions
KASHMANI LOGISTICS FZE
KRYPTON HOLDING FZE
LAGO AZUL FZE
LAWSON WISE ENTERPRISE FZE
LEVIAN INDUSTRIES FZE
LIBER LOGISTICS INTERNATIONAL FZE
LINXOIL GLOBAL TRADING FZE
LUMIRA CAPITAL LIMITED FZE
MARION COMMODITY DMCC
MARSOLUT MANAGEMENT DMCC
MERTON ROUTE FZE
METALINK TRADING FZE
MMBT ENERGY DMCC
MRIMEX TRANS FZE
NAVRATAN VENTURES FZE
NAWAEM LOGISTICS FZE
NEWTON RESOURCES FZE
NIMBUSTONE FZE
NOOKSPOT SERVICES FZE
OC ENTERPRISE FZE
OILPEAK PRODUCTS FZE
OLTON MIDDLE EAST FZE
OMEGA ENERGY LLC (Likely UAE LLC)
ORBINEX SOLUTIONS FZE
ORYX QA FZE
OSSYDEY INTEGRATED FZE
OXEL SOLUTIONS FZE
PACIFIC WATERS DMCC
PAN ELEMENTAL GROUP FZE
PERSEVERANCE DMCC
PETROMAX INTERNATIONAL FZCO
PHOENIX SOLUTIONS FZCO
PILADEA DMCC
POLY PRO TRADING DMCC
PONTUS TRADING DMCC
PRIMEALLIANCE TRADE LIMITED FZE
PRIMEGROWTH FZE
QUASAR TRADING FZE
RAFFLONLINE FZE
ROCKWELL ENERGY FZE
RR ALLIANCE FZE
RUBUS FZE
SARAWI EXPORTS FZE
SAS ALLIANCE FZCO
SCAFFOLLO GLOBE FZE
SELESTA INTERNATIONAL FZCO
SENTURA GLOBAL FZE
SHREEVAANI EXOM FZE
SILVERARC LOGISTICS FZE
SKYION SOLUTIONS FZE
SNS COMMODITIES DMCC
SOCIETE GALATEA FZE
TANZHOULI INTEGRATED FZE
TARS GLOBAL GROUP FZE
TETRAWATERS FZE
TEZOS FZCO
TIANWEI INTERNATIONAL FZCO
TOTCOR TRADE FZE
TRADESTREAM FZE
UNITYCOMEX TRADING LIMITED FZE
URBAN PROPERTIES FZE
VALORUP CONTINENTAL FZE
VALTARA VENTURES FZCO
VAULT ENERGY RESOURCES DMCC
VECTOR CHEMICALS DMCC
VENUTA DMCC
VENUTO DMCC
VENUTO FZE
VIVAVISTA TRADING DMCC
VOLITON DMCC
WESTPOINT GLOBAL FZE
WINDSTREAM ENERGIA DMCC
ZHESHANG RESOURCES FZE
ZION TRADE LIMITED FZE
Dubai Multi Commodities Centre (DMCC)
Jebel Ali Free Zone (FZE / FZCO structures)
Other UAE Free Zones
