Thanks for info. So now russia is using expensive S400 rockets agains cheap(?) drones? Does it mean that there is not enough other system or are there already some problems with number of missiles for these systems? It looks that number of UA drones is increasing and if now is RU using S400 then russia must stop attacking UA with S400 in surface mode to save missiles for air defence and maybe if it will continue then... RU will run out of missiles?
The topic about the refineries is both interesting and promising but also rather complex. So about the three refineries - you mentioned - if they are critical, they won’t be run for profit. Which means that either Russia has enough refining capacity without them, or that they have been significantly damaged in earlier strikes, or are just too old and inefficient (which is related to the first point). Also for diesel - if there is one thing I think that Russia will never be short of on a macro level (locally could be)- it is diesel. You just need to “boil” the crude oil, to get some form of diesel. Obviously fuel jet is a different story. So all in all, I’m not sure yet how to judge the strikes. Have they crippled domestic supply even on a regional or local base? Has there been any shortages, squeezes, etc? And I don’t have an answer. So I hope that after a concentrated campaign we will see some results but it seems we are not there yet.
This strikes reduce russia diesel/fuel export and repair is alco quite costly. Russia has some sanctions on oil export but less on fuel. So damage rafinery means russia has too much oil which is not able to export and less fuel which can be exported . From fuel you have also bigger gain. Russia income from oil/fuel exports is now much lower than it was used to be.
Diesel maybe less but gasoline for car ( jet fuel much more) needs to have some quality if not then modern cars can have problem with it. So this attacks can cause also that many cars will be disabled and also transporting fuel from Omsk to Rostov is not cheap.
Important is how long, fast, and how far can UA strike.
Sometimes we expect Ukraine to move faster than any other nation has ever achieved in warfare. After a year of experimenting with long-range drones, Ukraine has said it will produce many more of the most effective models this year. They have to be built first, but when they are, Ukraine will have the long-range capacity to attack munition dumps, manufactories, and refineries daily instead of once a week or month. The time to decide how effective this campaign has been will be at the end of the year, if not later.
Ukrainian strikes are having an effect. Anything that cuts into Russia's profits is good. But with those three it was about profitability and the margins are smaller with smaller refineries. With spare parts hard to come by, it makes sense to use them on higher-profit refineries.
Yes, but prices are rising inevitably which will keep them in business. Oil and fuel especially are goods with an inelastic price curve, so not substitute able. Think about it; if you don't fuel your car less, if you have to go to work. You have to, otherwise you won't arrive at work and have no income. That is especially true for all the food in supermarkets.
So to my mind, as fuel is also a bulk product, destroying or putting out all the refineries around Moscow is the biggest leverage for peace. No food on the table starts demonstrations and revolutions. Just look at the Arab spring.
If demand stays constant then the availability of oil/gas will impact the prices. It's why Biden asked Ukraine to stop attacking the refineries. It's why Saudi Arabia decided to delay in increase in production because they don't want to lower the purchase price.
Three years on, a lot of countries secured long term energy sources from places other than Russia, and the US election is over. Those could be contributing factors for an increase in attacks on Russia's energy infrastructure.
With regards to the three smaller refineries possibly shutting down, I'm just relaying what I read. Russia has plenty of gas/diesel for its own needs, even if the attacks continue. The biggest impact these attacks are having now is that they're reducing the amount of oil Russia exports. Last year, they shipped 9% less oil overseas. That's a lot of money. Since their oil industry still operates on a for-profit basis, it makes sense to shut down non-profitable production. They've done it with coal.
Yep, the crude oil price depends more on Saudis and US sanctions than on Ukrainian attacks. Mind that electric engines and China economy "not doing so well" have lowered oil consumption a bit and US is pumping more than ever. So, there's enough oil in the market. (Without the war in Ukraine, there would be oil price war now).
BTW. UA attacks have lowered oil products exports especially. (And Russia had to increase oil product import from Belarus, so it's loosing more money.)
A refineries revenue is influenced by oil prices. Refineries profits, as it is a very transperent market, not. They gain money by the surplus on the oil price to the processed product they are selling - let's take fuel.
Fuel is no longer exported from Russia as Putin issued an Export ban to keep prices down inside the country as this is one of the main ingredients in agriculture and the main cost for transport to the end consumer. If other refineries get destroyed, that increases the demand for your processing capabilities and you can sell with a higher surplus. That's what makes you profitable again. As fuel is price inelastic, that can easily get you out of the red, if for example Ryazan and others are closed for longer.
That effect you don't see her in the West as there is enought capacity. During a maintenance shutdown of the refinery in Schwechat, Austria our local prices for fuel went up, because of an accident it took them longer then expected and fuel had to be transported over longer distances.
You need to have in mind, that for fuel there would need to be separate oil pipelines. So if you check out the map I linked before and look at Moscow. Without knowing the capacity of the refinieries, but if Ukraine manages to stop the other ones in Moscow, Nizhny Nowgorod and Yarsolavl, there will be supply issues in Moscow. As there is less agriculture around Moscow compared to the south, that fuel is most likely going to a higher percentage into transportation (consumer goods, communtin to work). That hits the devil's heart.
The products that exported are produced near the coast lines of the Baltic and the Black Sea. There is quite a distance that would be needed to be covered by rail or truck to get the fuel back to the inner market, especially the biggest in Moscow, and you are quite aware how a) available Russian transport is and b) who would be the biggest competitor for the transport capabilities to run that.
Seems odd to continually blame Syrski for cauldrons that formed under Zaluzhnyi, and never to point out the failure to change to divisions and corps never occurred in the 2 years of Zaluzhnyi, who probably had more public support to push through changes.
Not at all. Zaluzhny was rarely meddling into operations, while Syrsky was the Commander Ground Forces - and thus micromanaging and destroying brigade-cohesion through '´battalion import-/export business' already under Zaluzhny.
Thanks for info. So now russia is using expensive S400 rockets agains cheap(?) drones? Does it mean that there is not enough other system or are there already some problems with number of missiles for these systems? It looks that number of UA drones is increasing and if now is RU using S400 then russia must stop attacking UA with S400 in surface mode to save missiles for air defence and maybe if it will continue then... RU will run out of missiles?
Well, S400 missile is probably cheaper than a jet plane parked at an airbase.
But it is more likely that they use Pantsyr against drones, and S400 is reserved to protect from Neptun or ATCAMS.
Thanks Don (&Tom)
The topic about the refineries is both interesting and promising but also rather complex. So about the three refineries - you mentioned - if they are critical, they won’t be run for profit. Which means that either Russia has enough refining capacity without them, or that they have been significantly damaged in earlier strikes, or are just too old and inefficient (which is related to the first point). Also for diesel - if there is one thing I think that Russia will never be short of on a macro level (locally could be)- it is diesel. You just need to “boil” the crude oil, to get some form of diesel. Obviously fuel jet is a different story. So all in all, I’m not sure yet how to judge the strikes. Have they crippled domestic supply even on a regional or local base? Has there been any shortages, squeezes, etc? And I don’t have an answer. So I hope that after a concentrated campaign we will see some results but it seems we are not there yet.
This strikes reduce russia diesel/fuel export and repair is alco quite costly. Russia has some sanctions on oil export but less on fuel. So damage rafinery means russia has too much oil which is not able to export and less fuel which can be exported . From fuel you have also bigger gain. Russia income from oil/fuel exports is now much lower than it was used to be.
Diesel maybe less but gasoline for car ( jet fuel much more) needs to have some quality if not then modern cars can have problem with it. So this attacks can cause also that many cars will be disabled and also transporting fuel from Omsk to Rostov is not cheap.
Important is how long, fast, and how far can UA strike.
Sometimes we expect Ukraine to move faster than any other nation has ever achieved in warfare. After a year of experimenting with long-range drones, Ukraine has said it will produce many more of the most effective models this year. They have to be built first, but when they are, Ukraine will have the long-range capacity to attack munition dumps, manufactories, and refineries daily instead of once a week or month. The time to decide how effective this campaign has been will be at the end of the year, if not later.
"The three refineries are likely to close completely early this year."
If they are working the entire year, it is a good sign that Ukrainian strikes have an effect - under the premises that spares are available.
Ukrainian strikes are having an effect. Anything that cuts into Russia's profits is good. But with those three it was about profitability and the margins are smaller with smaller refineries. With spare parts hard to come by, it makes sense to use them on higher-profit refineries.
Yes, but prices are rising inevitably which will keep them in business. Oil and fuel especially are goods with an inelastic price curve, so not substitute able. Think about it; if you don't fuel your car less, if you have to go to work. You have to, otherwise you won't arrive at work and have no income. That is especially true for all the food in supermarkets.
So to my mind, as fuel is also a bulk product, destroying or putting out all the refineries around Moscow is the biggest leverage for peace. No food on the table starts demonstrations and revolutions. Just look at the Arab spring.
Just have a look at the map: https://www.google.com/search?client=ms-android-samsung-ss&sca_esv=0775037aa50d819d&sxsrf=AHTn8zrILd51wZupUD9vpaUWLF9UuZlIgw:1738651173419&q=map+of+russian+oil+refineries+pdf&udm=2&fbs=ABzOT_DDfJxgmsKFIwrWKcoyw2Rf7ED7CYyDAoRz3agYVnoe8Xz1PJwIWeWQ1lRcz9QaDxiCqY8-Y10NyQ0DOOicf9U9RTzUSVjqXIIJ4OOctBYlZ4jA1MOAVnRw_GzqJAai0mcmBX0isz_PQmDqXwA_rZQKTHy9DWBcbB5cAA17B0Oks4JTqAsBKOU9tOPtVaS2lWV6VYxH&sa=X&ved=2ahUKEwjfw9GstKmLAxUHgP0HHQKfHbwQtKgLegQIDBAB&biw=360&bih=646&dpr=3#vhid=z1yP0-fqQ9rlvM&vssid=mosaic
It's just 4 and Ryazan is one of them and I think one of the biggest there - not comparable to Ufa, but that is far away.
If demand stays constant then the availability of oil/gas will impact the prices. It's why Biden asked Ukraine to stop attacking the refineries. It's why Saudi Arabia decided to delay in increase in production because they don't want to lower the purchase price.
Three years on, a lot of countries secured long term energy sources from places other than Russia, and the US election is over. Those could be contributing factors for an increase in attacks on Russia's energy infrastructure.
With regards to the three smaller refineries possibly shutting down, I'm just relaying what I read. Russia has plenty of gas/diesel for its own needs, even if the attacks continue. The biggest impact these attacks are having now is that they're reducing the amount of oil Russia exports. Last year, they shipped 9% less oil overseas. That's a lot of money. Since their oil industry still operates on a for-profit basis, it makes sense to shut down non-profitable production. They've done it with coal.
Yep, the crude oil price depends more on Saudis and US sanctions than on Ukrainian attacks. Mind that electric engines and China economy "not doing so well" have lowered oil consumption a bit and US is pumping more than ever. So, there's enough oil in the market. (Without the war in Ukraine, there would be oil price war now).
BTW. UA attacks have lowered oil products exports especially. (And Russia had to increase oil product import from Belarus, so it's loosing more money.)
A refineries revenue is influenced by oil prices. Refineries profits, as it is a very transperent market, not. They gain money by the surplus on the oil price to the processed product they are selling - let's take fuel.
Fuel is no longer exported from Russia as Putin issued an Export ban to keep prices down inside the country as this is one of the main ingredients in agriculture and the main cost for transport to the end consumer. If other refineries get destroyed, that increases the demand for your processing capabilities and you can sell with a higher surplus. That's what makes you profitable again. As fuel is price inelastic, that can easily get you out of the red, if for example Ryazan and others are closed for longer.
That effect you don't see her in the West as there is enought capacity. During a maintenance shutdown of the refinery in Schwechat, Austria our local prices for fuel went up, because of an accident it took them longer then expected and fuel had to be transported over longer distances.
You need to have in mind, that for fuel there would need to be separate oil pipelines. So if you check out the map I linked before and look at Moscow. Without knowing the capacity of the refinieries, but if Ukraine manages to stop the other ones in Moscow, Nizhny Nowgorod and Yarsolavl, there will be supply issues in Moscow. As there is less agriculture around Moscow compared to the south, that fuel is most likely going to a higher percentage into transportation (consumer goods, communtin to work). That hits the devil's heart.
The products that exported are produced near the coast lines of the Baltic and the Black Sea. There is quite a distance that would be needed to be covered by rail or truck to get the fuel back to the inner market, especially the biggest in Moscow, and you are quite aware how a) available Russian transport is and b) who would be the biggest competitor for the transport capabilities to run that.
Thank you so much for this very intersting text.
Seems odd to continually blame Syrski for cauldrons that formed under Zaluzhnyi, and never to point out the failure to change to divisions and corps never occurred in the 2 years of Zaluzhnyi, who probably had more public support to push through changes.
Not at all. Zaluzhny was rarely meddling into operations, while Syrsky was the Commander Ground Forces - and thus micromanaging and destroying brigade-cohesion through '´battalion import-/export business' already under Zaluzhny.
Why didn't Zaluzhnyi overrule Syrskyi over Severodonetsk then? And the divisions/corps structure?