Russian refineries raised their crude-processing volumes to highest levels in 10 weeks as the nation’s downstream maintenance season nears its end.
(Bloomberg) — Russian refineries raised their crude-processing volumes to highest levels in 10 weeks as the nation’s downstream maintenance season nears its end.
Russia processed over 5.6 million barrels of crude a day in the week ending June 21, according to a person familiar with the matter. That’s nearly 115,000 barrels a day more than the week before. It’s also the highest weekly processing rate since April 6-12, historical data show.
Average processing for the month through June 21 grew to 5.46 million barrels a day, the person said. Russia’s daily refinery runs have been gradually recovering this month as the facilities complete scheduled work ahead of the high-demand harvesting and holiday season, the data show.
Russia is considering cutting subsidies to the nation’s refiners as it seeks to limit spending amid its war in Ukraine. Those subsidies could be halved, potentially as soon as September, according to the Finance Ministry.
As a result, refiners may also be willing to boost their processing rates now, according to Vasilii Anishchenko, a partner at consultancy B1 Group, formerly EY Russia. Taking these plans into account, “producers may adjust their crude processing and transfer volumes from the fourth quarter to the third, when they will still be able to receive the subsidies in full,” he said.
Crude supplies to Russian refineries, along with seaborne exports, remain the key gauges for oil-market observers seeking clues to the nation’s production levels after the government classified output data amid Western sanctions. The country pledged to cut output by 500,000 barrels a day starting in March, responding to restrictive measures adopted by the West, including a G-7 price cap on its crude sales.
While Russia’s Deputy Prime Minister Alexander Novak has said the country’s producers have achieved the targeted cuts compared to the baseline, seaborne exports, which remain well above levels seen in February, and the recovering domestic crude processing cast doubt on the claims.
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