Russian refineries are increasing crude oil processing to boost fuel exports following the imposition of new US sanctions, which are complicating crude oil sales, reported Reuters, citing two industry sources and data.

The sanctions, part of the Western response to Russia's invasion of Ukraine, have made crude exports to Asia more costly and complex. As a result, Russian refining increased by 2%, or 108,000 barrels (bbl), from 15–19 January compared with the first week of the year, sources said.

Refining runs rose to 754,800 tonnes per day during the period, up 1.2% from the average for January 2024.

Despite the sanctions, Russia has some leeway for fuel exports under a G7 price cap, allowing for the use of Western fleet and shipping services for sales below certain price thresholds. However, the price cap for Russia's Urals blend is below the current market price of $70.

The US Treasury implemented broad measures aligned with the G7 pledge to cut Russian energy revenues, including blocking two major oil producers, Surgutneftegaz and Gazprom.

The push to increase refining is challenged by Ukrainian drone attacks and economic overheating. Rosneft has expressed concerns that refinery modernisation plans may be compromised.

Russian refineries are maximising production, betting on finding vessels for fuel exports after the sanctions targeted crude oil tankers.

The Biden administration's sanctions, introduced just before President Donald Trump's return to office, affected approximately 180 tankers, primarily transporting Russian oil.

In 2024, these tankers carried around 1.5 million barrels of crude per day and 200,000bbl of refined products daily, according to investment bank Morgan Stanley.

Additionally, Surgutneftegaz's Kirishi refinery increased its processing by nearly 8% in early January.

Despite the West's intention not to halt Russian exports entirely, the aim is to cut revenues to end the conflict in Ukraine.