Russia will put on hold more 38% of its primary oil refining capacity in July than originally expected, complicating the task of promised oil exports cuts, according to data from industry sources and Reuters calculations.

Still, offline capacity is expected to significantly decline from June. An increase in idle oil refining capacity usually incentivizes exports.

The upward revision has been made as some large refineries expanded the period of maintenance or mothballing their units. For example, Astrakhan gas processing plant extended the maintenance of its primary unit by 27 days until July 27.

Deputy Prime Minister Alexander Novak announced last week that Russia would cut oil exports by 500,000 barrels per day in August amid weak global oil prices.

Russia needs to keep the domestic market awash with enough fuel to meet rising demand in the summer driving season. It also has to tackle soaring wholesale gasoline prices, pushed up by shortages of supply and ample idle oil refining capacity.

According to data from industry sources and Reuters calculations Russia’s offline primary oil refining capacity has been revised up from the previous plan to 2.326 million tonnes.

In June Russia’s offline primary oil refining capacity was at 3.966 million tonnes, down by 0.824 million tonnes on May, according to the data and Reuters calculations.
Source: Reuters (Reporting by Reuters, Editing by Louise Heavens)