Ukraine's strikes disrupt Russian oil exports, with production cuts imminent

Chainwire April 2 news, according to Reuters, three industry sources said on Thursday that Russia’s oil production cuts are now imminent after attacks by Ukraine on port infrastructure, pipelines, and refineries weakened export capacity by about 1 million barrels per day (about one-fifth of total capacity). As the world’s second-largest oil exporter, once Russia cuts production, it will further intensify global supply tightness in the backdrop of unprecedented supply disruptions already caused by the Middle East conflict. Over the past month, Ukraine has increased its attacks on Russia’s oil export infrastructure, targeting the Baltic Sea port of Ust-Luga and Primorsk. Sources said at least 20% of Russia’s total export capacity is currently shut down, down from 40% at the March peak, but still enough to affect oil output in this world’s third-largest oil producer. The main Baltic port, Ust-Luga, had already suspended oil exports a week earlier; the oil pipeline system has been “jammed” with crude oil, and storage space is filling up rapidly. This means some oil fields must reduce output to prevent the system from becoming even further overloaded.