Ukrainian drone strikes on Russian oil infrastructure, which began in early August, have significantly impacted Russia’s fuel exports. From September 1st to 15th, fuel shipments dropped by 18% year-over-year, according to Kommersant, citing data from the Centre for Price Indices. The attacks, including damage to the port of Primorsk, led to temporary halts in shipments and unscheduled refinery repairs. Consequently, Russia’s refining output has declined, with analysts from JPMorgan noting a significant decrease in throughput.
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The Russian government will hold an emergency meeting with oil companies on August 14th to address the significant surge in fuel prices. Gasoline prices have risen substantially since the beginning of the year, prompting officials to consider measures like increasing fuel sales quotas. This price increase follows a ban on gasoline exports and is exacerbated by Ukrainian drone strikes on Russian oil refineries, which are critical for Moscow’s revenue. The disruptions to refinery operations have further strained the domestic market and contributed to the rising prices.
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The Keystone oil pipeline, spanning nearly 2,700 miles, was shut down Tuesday following a rupture in North Dakota, halting the flow of millions of gallons of crude oil. The spill, contained to an agricultural field, triggered concerns about potential gasoline price increases, particularly for diesel and jet fuel, due to the pipeline’s transport of unique heavy crude. While initial price impacts may be limited by refinery reserves, prolonged shutdowns could significantly affect fuel costs and potentially even grocery prices. The cause of the rupture is currently under investigation by the Pipeline and Hazardous Materials Safety Administration.
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John Q. Hosedrinker