Russia could lose 30% of oil refining capacity for 18 months – IEA report

The International Energy Agency (IEA) has cut its baseline forecast for Russian oil refining over the next 18 months to approximately 4 million barrels per day – 30% below the level before the invasion of Ukraine.

Source: IEA's monthly oil market report, as reported by Bloomberg

Quote: "Risks remain that even this more cautious assessment may yet understate the problems that Russia's refining complex faces.

Longer lead-times to source replacement parts and the approach of colder weather could compound the stress placed on the Russian system."

Details: According to the IEA, Russia's oil refining industry is deteriorating as sanctions prevent the sector from recovering from intensive and precise Ukrainian drone strikes.

"It now appears likely that the persistent drone strikes and the patchwork nature of repairs are having a cumulative negative effect and degrading the refining system," the organisation said.

In August, Russian oil refineries were hit at least 22 times – the highest monthly figure since the beginning of the full-scale war.

"Ukrainian forces are using multiple drone waves against single sites, overwhelming protective netting and air defences," the report said. "The targeting also appears more precise," the report says.

Drones are now hitting secondary processing units at Russian oil refineries, whose replacement could take around six to eight months, according to the IEA.

Meanwhile, sanctions against Russia's energy sector are restricting its access to replacement equipment, making repairs even more difficult.

The agency also cut its forecast for Russian oil supply in 2026 by 125,000 barrels per day, to 8.7 million barrels per day.

Background: In its May report, the IEA wrote that Russian crude oil production had fallen by around 5% compared with the same period in 2025, to 8.7 million barrels per day – 10% below the monthly target.

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