Oil Daily | Ukrainian Strikes on Russian Refineries Disrupt Operations, Highlight Energy Vulnerabilities

【Oil-Producing Countries Dynamics】

Ukraine’s drone campaign has hit the Volgograd refinery, a major Russian energy asset, halting crude intake and causing a fire. The 300,000 bpd facility was targeted amid broader Ukrainian strikes on Russian refineries, disrupting Russia's downstream operations, increasing Russian crude exports, and highlighting vulnerabilities in Russian energy logistics.

Ukraine claimed attacks on Russian energy infrastructure, hitting the Syzran refinery and the Olya port used for Iranian weapon shipments. Strikes on Russian refineries like Saratov have led to offline operations, reducing domestic fuel supply and potentially increasing crude exports via western ports.

Algeria is nearing agreements with Exxon and Chevron to explore its shale gas resources, aiming to boost pipeline and LNG exports. The deal could enhance Algeria's position as a key provider of gas to Europe, which seeks alternatives to Russian supplies. Most Algerian gas exports target the European market.

【Latest Oil Policies】

The UK government declined to bail out bioethanol plants, citing the lack of taxpayer value and long-term solutions. The U.S.-UK trade deal, which removed a tariff on U.S. bioethanol imports, has made UK-produced bioethanol uncompetitive. Vivergo Fuels warned of potential closure due to governmental decisions favoring U.S. imports.

【Company News】

Devon Energy signed a 10-year agreement to supply LNG to UK's Centrica, starting in 2028. The deal, indexed to European gas prices, aims to manage market price risk and supports Centrica's energy trade links with the U.S. Centrica also recently partnered to acquire the UK's largest LNG import terminal.

【Others】

Greenergy is considering ceasing production at a UK biodiesel plant due to challenging market conditions. The decision aligns with broader difficulties faced by UK biofuel producers following the U.S.-UK trade deal impacts on competitiveness.