Ukrainian strikes on key facilities like the Gazprom Neftekhim Salavat and Afipsky plants have crippled approximately one-third of Russia’s domestic refining capacity. Daily output has plummeted to 3.91 million barrels, a level not seen since 2005. With the domestic market unable to absorb the supply, Moscow is pushing crude into international waters, even as its total production remains suppressed at 8.93 million barrels per day—falling roughly 830,000 barrels short of its OPEC+ quota.

This shift has triggered a massive gridlock at export hubs. Cargoes of Sokol and Sakhalin Blend face extensive delays during ship-to-ship transfers, while ESPO crude stacks up near the Kozmino terminal. Russia’s shadow fleet, now clustering near Egypt and Indonesia, struggles to find buyers as secondary sanctions deter international partners. Despite seaborne exports reaching a four-week average of 4.13 million barrels per day—the highest rate since early 2022—revenue is cratering. Weekly earnings dropped by $200 million to $1.68 billion, squeezed by widening price discounts and the volatile nature of the Urals market.