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Attacks carried out by Ukrainian drones have severely disrupted operations at Russia’s key Baltic Sea oil terminals, leaving ports such as Ust-Luga and Koivisto struggling to process shipments at normal capacity, according to Reuters. As a result, Russian refineries are being forced to reroute exports through alternative channels, including significantly more costly rail transport to other terminals. The disruption has hit diesel exports especially hard. Since March 22, shipments from Koivisto have effectively ceased. The port had been a major outlet for refined products from refineries located in both European Russia and Siberia. Infrastructure damage has also forced the diversion of fuel oil and other petroleum products to secondary ports, such as Vysotsk and Taman. However, these facilities face constraints, including reduced handling capacity and more complicated transport logistics. Market participants warn that the bottlenecks are placing growing strain on Russia’s oil export network and could ultimately result in reduced production levels. According to Finland’s maritime authorities, traffic from Koivisto and Ust-Luga has plummeted to roughly a single departing vessel, compared to the typical weekly volume of 40 to 50 tankers. Earlier waves of large-scale drone attacks targeted Russian Baltic ports including Ust-Luga and Primorsk, effectively bringing seaborne oil exports in the region to a near standstill. During the final week of March alone, Russia’s maritime exports of crude and petroleum products sharply declined, leading to estimated losses exceeding $1 billion in revenue for the Kremlin. Meanwhile, continued strikes on critical infrastructure have caused storage facilities to fill up, as shipments are unable to move out. Analysts suggest this backlog could force a cut in domestic oil output, given the lack of available storage capacity. In addition, damage inflicted by Ukrainian drone attacks has reportedly reduced oil storage capacity at Primorsk by at least 40%, further compounding the strain on Russia’s export system. Ust-Luga is one of Russia’s largest and most modern ports, located near the Gulf of Finland. It serves as a major hub for exporting crude oil, fuel oil, and other petroleum products. The port is equipped with large-scale storage tanks, deep-water terminals capable of handling large tankers, and connections to pipeline systems that bring oil from inland fields and refineries. Koivisto, though smaller, has been an important outlet for refined products such as diesel, especially for refineries in European Russia and parts of Siberia.
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