This article first appeared on GuruFocus.
Russian oil exports are starting to run out of options as Ukrainian drone strikes cut deeper into the country’s refining system. Since early August, Ukraine has hit at least 15 refineries, with successful strikes pulling Russia’s refinery runs below 5 million barrels a day, according to JPMorgan estimates. That drop equates to roughly 500,000 barrels a day of curtailed processing, creating pressure on Moscow to push more crude into export markets. Yet shipping data indicates the maneuvering room is limited. Primorsk in the Baltic and Novorossiysk in the Black Sea are already pushing near 18-month highs, while Ust-Luga remains below its October 2024 peak, in part due to repeated strikes on pipelines feeding the port.
The spare capacity across these three key western ports may be just 165,000 to 265,000 barrels a daywell below the lost refining volume. Kozmino, the Pacific hub that handles more than 1 million barrels a day, is already running close to capacity, and winter weather often constrains its operations. Other terminals, such as De Kastri, Prigorodnoye, and Murmansk, are either tied directly to specific oil projects or cut off from the main pipeline grid, making them less viable options for rerouted crude. This suggests that Russia’s ability to divert supplies could be nearing its ceiling at a time when global balances remain fragile.
The timing matters because OPEC+ is preparing to meet this weekend, and Moscow may have an incentive to lean on partners to lift output if its own flows stall. Any shift in production quotas could ripple through crude benchmarks and energy-linked assets. For investors, the developments raise the risk of renewed volatility in energy markets, where crude prices often influence broader macro sentiment and even trading dynamics in equities like Tesla (NASDAQ:TSLA), which have historically moved in tandem with energy shocks.
