Putin's gas station on the verge of collapse: Russian refineries are massively cutting production.

Russian refiners halted operations due to losses

Three oil refineries in Russia - Tuapse, Ilsky, and Novoshakhtinsk - have been forced to halt operations or significantly reduce processing volumes due to losses. This was reported by Reuters citing sources familiar with the situation.

The most affected were outdated enterprises that do not produce premium fuel. The losses of such plants amounted to up to 10,000 rubles per metric ton over several months in the second half of 2024.

Ilsky and Novoshakhtinsk refineries operate only at half their capacity, processing 70,000 and 60,000 barrels per day, respectively. Rosneft has also been forced to suspend operations at its Tuapse plant due to low profitability.

The economic situation has been complicated by the increase in the key rate of the Central Bank of the Russian Federation to 21% and the rise in domestic oil prices to 50,000 rubles per ton. Additionally, the decline in European diesel prices by 60% negatively affected the situation.

Private refineries have appealed to the government for additional subsidies. It is expected that some plants may be effectively closed at the beginning of next year.

There are 30 oil refineries in Russia with a total processing capacity of 5.5 million barrels per day, making it one of the largest fuel exporters in the world.