Ukrainian drone strikes destroy Russian oil refining capacity, says Gunvor CEO

Torbjörn Törnqvist, the Chief Executive Officer of Gunvor Group Ltd., has estimated that about 600,000 barrels of Russia’s daily oil-refining capacity were knocked out by Ukrainian drone strikes.

These strikes targeted multiple plants in Russia, including some located deep within its borders, leading to a surge in diesel and gasoline futures prices, Caliber.Az reports, citing Bloomberg.

Speaking during an interview at the CERAWeek by S&P Global conference in Houston on Monday, Törnqvist highlighted the significance of the situation, particularly its impact on distillate exports. He noted that the disruption is likely to reduce exports by a couple of hundred thousand barrels, emphasizing that it represents a notable challenge for the distillate market.

Gunvor, which was a major trader of Russian petroleum before the onset of the conflict in Ukraine, has since scaled back its involvement in the trade. The company has been navigating the evolving energy landscape amidst geopolitical tensions.

JPMorgan Chase & Co. provided a higher estimate, suggesting that the Ukrainian attacks had taken about 900,000 barrels a day of Russian oil refining capacity offline. Analysts, including Natasha Kaneva, projected that it could take "several weeks, if not months" for the capacity to be restored. They also indicated that the strikes had added approximately $4 a barrel of risk premium to global crude prices.

Despite these disruptions, Törnqvist expressed confidence in the overall balance and valuation of crude oil markets. He anticipates that US supplies will grow at a slower rate this year compared to previous years, with non-OPEC supply growth expected to remain flat.

Looking ahead, Gunvor, co-founded by Törnqvist in 2000, has diversified its portfolio by recently acquiring liquefied natural gas tankers. The company foresees shipping playing a significant role in its growth trajectory in the coming years, amid ongoing shifts in the energy landscape.