U.S. Sanctions Hinder Russian Refinery Repairs, Exacerbate Energy Sector Woes

Russian oil firm Lukoil faces significant challenges repairing its largest refinery due to the withdrawal of a crucial American company, UOP, after Russia's invasion of Ukraine, Robert Harvey reported for Reuters.

Lukoil estimates nearly $100 million in monthly revenue losses from the refinery's outage. I Photo: LUKOIL Facebook

The absence of UOP, which specialized in repairing the refinery's catalytic cracker, has led to a production halt since January, affecting gasoline output.

The NORSI refinery, located in Russia's Nizhny Novgorod region, has slashed gasoline production by 40% due to the catalytic cracker's inoperability, impacting approximately 11% of Russia's total gasoline capacity.

Lukoil estimates nearly $100 million in monthly revenue losses from the refinery's outage.

Compounding these issues are Ukrainian drone attacks on Russian refineries, which forced closures amounting to 14% of capacity in the first quarter of 2024. The combination of sanctions and attacks underscores the significant challenges faced by Russian oil firms in maintaining refinery operations.

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