Russian Refinery Runs Hit 24-Year Low as Urals Export Surplus Builds
Ukraine's drone campaign has cut Russian processing to 3.6 million bpd, pushing crude toward export terminals and lifting Urals spot prices.
Russian crude processing fell in July to its lowest monthly level since May 2002, with refineries running an estimated 3.6 million barrels per day, roughly one-third below the seasonal average, according to The Moscow Times reporting Bloomberg data. Ukraine's expanded drone campaign, which spread from refineries to tankers, pipelines and export infrastructure, drove the outage.5
Between 2020 and 2025, Russian refineries typically processed between 5.3 million and 5.6 million bpd in July, The Moscow Times reported. At 3.6 million bpd, the shortfall against historical norms implies roughly 1.7 to 2 million barrels per day of crude that would normally be absorbed domestically is instead seeking export or storage.5
Production has moved in the opposite direction. Industry data indicate Russian output has climbed back above 9 million barrels per day — compared with the 9.6 million bpd Russia averaged in 2023 during the deeper OPEC+ cut period. The widening gap between what Russia pumps and what its refineries process is pushing more crude toward Baltic and Black Sea export terminals.1
India is absorbing much of that flow. Kpler vessel-tracking data, as reported by the Times of India, show India's crude imports from Russia hit a record 2.8 million bpd in July, up from the previous high of 2.7 million bpd in June. Russian barrels accounted for 55.5 percent of India's total crude imports, which edged up to just over 5 million bpd.4
Indian refiners have kept buying despite repeated threats to shipping in the Strait of Hormuz and more recently at the Bab el-Mandeb Strait. Analysts expect Russian crude to remain a key source for India as those chokepoints stay volatile.4
The Urals spot price stood at $79.19 per barrel as of Sunday (2026-08-09), sitting above the Dubai Crude price of $78.38 per barrel recorded on the same date. ICE Brent front-month settled at $82.38 and NYMEX WTI front-month at $77.08 as of Sunday (2026-08-09).5
Moscow is paying to keep the refinery system's output at home even as throughput collapses. Russia's subsidy payouts to oil refiners jumped more than six-fold in June from a year earlier, reaching 210.6 billion rubles ($2.72 billion), according to Rigzone. That effort keeps domestic diesel and gasoline sheltered from the export pool, but it does not address the crude that refineries simply cannot process.2
The subsidy picture and the processing gap pull in opposite directions. Refined product stays home. Raw crude does not. With runs at a 24-year low, the surplus available for export is substantial and Urals differentials have firmed in response.5,2
Mirae Asset's Mohammed Imran has said risk is skewed to the upside, with Brent expected to average around $80 if the conflict is not prolonged, but potentially $90 per year-end if Strait of Hormuz disruption extends until mid-September. A scenario of sustained chokepoint pressure would lift Urals alongside the broader complex, though renewed attacks on Russian export infrastructure could complicate those dynamics.3
What could break the current export flow is a drone strike on a major loading terminal. The July campaign already hit refineries, tankers and pipelines. A direct hit on a key Baltic or Black Sea loader would shift the market from exportable surplus to outright shortage faster than the trade can reroute.5
Russian refinery run data for early August and any fresh attacks on export infrastructure are the signals to track. A sustained run rate below 4 million bpd would keep Urals elevated; a recovery toward the historical 5-million-bpd range would ease spot pressure quickly.5