Ukraine drone strikes halt Russian Baltic oil exports, fuelling market uncertainty

Ukraine drone strikes halt Russian Baltic oil exports, fuelling market uncertainty
A general view of Ust-Luga oil products terminal. 9 April, 2014.
Reuters

Russia’s Baltic ports of Primorsk and Ust-Luga, major export terminals, suspended loadings of crude oil and refined products on Wednesday after large-scale Ukrainian drone attacks triggered a blaze, sources told Reuters. 

The strikes mark one of the most significant attacks so far on Russia’s oil export infrastructure during the four-year war, and are likely to heighten uncertainty in global oil markets, already strained by conflict in the Middle East.

Thick plumes of black smoke rose into the sky, according to unverified videos circulating on Telegram. Finland’s Helsingin Sanomat newspaper reported the smoke was visible across the Gulf of Finland from dozens of miles away.

Earlier on Wednesday, Russian officials said a fire had broken out at Ust-Luga following a Ukrainian drone attack. Nearby Primorsk has also been targeted in recent days.

Ukraine has intensified drone strikes on Russian oil refineries and export routes in recent weeks, aiming to undermine Moscow’s war economy as U.S.-brokered peace talks have stalled.

Both Ust-Luga and Primorsk, located on the Gulf of Finland, were also forced to suspend exports on Sunday following similar attacks, although loadings partially resumed on Monday, Reuters reported.

Primorsk, with export capacity exceeding 1 million barrels per day, is a key outlet for Russia’s flagship Urals crude and high-quality diesel.

Sources said Ust-Luga exported 32.9 million metric tonnes of oil products last year, while Primorsk shipped 16.8 million tonnes.

Alexander Drozdenko, governor of the Leningrad region, said the fire at Ust-Luga followed a drone attack across the region. No casualties were reported.

One source, speaking on condition of anonymity, said the terminal had been sealed off and storage reservoirs were ablaze.

Russia’s defence ministry said it had shot down 389 Ukrainian drones overnight across the country, including over the Moscow region.

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