Russian oil depot on fire in Kursk region after drone attack

An oil depot in Russia's Kursk region caught fire March 10 after a Ukrainian drone fell on the site, local authorities said.

Roman Starovoyt, the Kursk regional Governor, confirmed via Telegram that a Ukrainian drone crashed into the oil depot March 10, adding that emergency services were working at the scene.

"In Kursk, the air defense system is working," he said, suggesting that the drone had been downed above the site.

The attack marks the second attempt on oil facilities in the region, located some 100 km from the Ukrainian border, as part of a sustained Ukrainian offensive in recent months.

A fire was previously reported in a 100-mt fuel tank at the Kursk region's Polevaya oil terminal Feb. 15, in a move targeting domestic fuel capacity within Russian territory.

Previous attacks have also hurt Russia's export capacity, necessitating ongoing maintenance at the 240,000-b/d Tuapse refinery on the Black Sea and leaving uncertainty around operations at Novatek's Ust-Luga gas condensate processing facility.

The drone offensive has previously been indiscriminate in targeting both domestic storage and export-oriented infrastructure, taking out capacity at the Tuapse and Ilsky refineries on the Black Sea and the Novatek gas condensate processing capacity on the Baltic Sea.

Fuel supply pressure

The latest drone strike comes amid mounting concern from the Russian authorities around domestic fuel supply ahead of peak demand season. On Feb. 27, the government announced it would implement a six-month ban on gasoline exports, following reports that Russian refinery throughput had fallen 7% since the start of the year.

The measure, mirroring controls implemented last September, was necessitated by a fluid catalytic cracker outage at Russia's 17 million mt/year Norsi refinery, according to officials, who expect the unit to remain offline for several months, according to Energy Minister Nikolay Shulginov.

Ukrainian drone strikes have exacerbated fuel supply concerns, while Western sanctions have extended downtimes. "Repairs are likely to take longer than normal as Western sanctions have prevented the import of some necessary components," said the UK Ministry of Defence in a statement on X March 9.

According to recent estimates, repairs at Tuapse are expected to last until the summer, while the operational status at Novatek remains opaque despite resumed exports.

So far the export ban has not significantly affected domestic gasoline prices, which have been climbing since the start of the year. Stockpiling ahead of the driving season and upcoming spring refinery turnarounds has kept prices firm, sources have said, while ongoing railcar delays, especially in the far east and south of Russia, have disrupted timely deliveries.

Seasonal refinery turnarounds starting in March are expected to further tighten markets, though for the moment are expected to be lighter than 2023.

"The Russian government will be particularly sensitive to rising prices for gasoline and other daily commodities in the run-up to the March 15-17 Russian presidential election," said the UK Ministry of Defence in its statement, flagging a close watch likely to be maintained on domestic pricing in the week ahead.

Suspected drone strikes expand reach across Russian energy infrastructure