When Lukoil found a broken turbine at its largest refinery on January 4, it became clear there was a major issue. Situated at the NORSI refinery on the Volga River, this crucial unit, essential for making gasoline, needed immediate attention.
Repairing it required expertise from an American company, UOP, which had left Russia after the 2022 Ukrainian invasion. The lack of spare parts and know-how forced a stop in production at the catalytic cracker unit, responsible for turning hydrocarbons into gasoline.
The refinery’s gasoline output dropped by 40%, highlighting wider problems in Russia’s energy sector. Western sanctions had blocked access to key technologies and expertise, compounding challenges for Russian oil companies.
The situation worsened with Ukrainian drone attacks targeting Russian refineries, further hindering production. These assaults, combined with the absence of expertise and parts, paralyzed significant parts of Russia’s refining capability, affecting fuel supply both at home and abroad.
Efforts to restart operations at the damaged NORSI facilities faced obstacles, with Lukoil estimating losses of nearly $100 million per month. The difficulties underscored Russia’s energy vulnerability amid geopolitical tensions and sanctions.
Russia faces $100 million losses as industry struggles (Via Tom Smith/Shutterstock)
Deputy Prime Minister Alexander Novak promised damaged facilities would resume operations in a few months, but uncertainties lingered about the repair timeline and effectiveness.
Meanwhile, international companies like ABB and UOP ceased operations in Russia after sanctions, indicating a broader trend of withdrawing from the Russian market.
As Russia dealt with refinery disruptions, questions arose about its energy security and resilience in the face of geopolitical and economic pressures.
The turmoil highlighted how interconnected global energy markets are and how geopolitical tensions can impact energy infrastructure and supply chains.
