Gunvor says drones shut Down 600,000 barrels of Russia refining

Gunvor Group Ltd. Chief Executive Officer Torbjörn Törnqvist estimates about 600,000 barrels of Russia’s daily oil-refining capacity has been knocked out by Ukrainian drone strikes.

Weekend drone strikes hit multiple plants in Russia, some deep inside its borders, sending diesel futures higher for a fourth straight session while gasoline futures climbed for a sixth.

“It is significant because obviously this is gonna hit the distillate exports straight away,” Törnqvist said during an interview at the CERAWeek by S&P Global conference in Houston on Monday. “So that will probably take down exports by a couple of hundred thousand barrels, so to me it’s a distillate problem.”

Gunvor was a major trader of Russian petroleum before the invasion of Ukraine but retreated from the trade not long after the conflict began.

Broadly writ, crude oil markets are mostly in balance and fairly valued, Törnqvist said, adding that US supplies are likely to grow this year by about half the rate of 2023’s 700,000-to-800,000 barrel-a-day pace. Still, non-OPEC supply growth overall is likely to be flat this year, he said. 

Gunvor, co-founded by Törnqvist in 2000, recently bought liquefied natural gas tankers, and expects shipping to be a significant driver of the firm’s growth in coming years.