Ukraine’s Drone Campaign Drives Russian Oil Refining to 24-Year Low

Russian crude processing fell to its lowest level in more than two decades in July after Ukraine expanded its drone campaign from refineries to tankers, pipelines and export infrastructure, according to The Moscow Times, citing Bloomberg analysis. Russian refineries processed an estimated 3.6 million barrels per day in July, the lowest monthly level since May 2002 and roughly one-third below the seasonal average. Between 2020 and 2025, Russian refineries typically processed between 5.3 million and 5.6 million barrels per day during the same…

Refining & Products Context

Downstream margins — or crack spreads — have experienced considerable volatility as refinery operators navigate feedstock cost fluctuations, product demand seasonality, and evolving fuel specifications. Gasoline and distillate margins serve as key profitability levers for integrated refiners.

Refinery utilization rates, particularly in the U.S. Gulf Coast and Northwest European hubs, directly influence product availability and pricing. Unplanned outages, scheduled turnarounds, and weather-related disruptions are recurring factors that tighten regional product supply.

What to Watch

Key metrics to watch include refinery utilization rates, weekly distillate inventory builds or draws, and crack spread movements, which serve as real-time indicators of refining profitability across major processing hubs.