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It’s a great time to be an oil refiner — but a less great time to be filling up at the pump.In Europe, the US and Asia, giant plants are making money by doing what they’ve always done: converting crude oil into vital fuels and selling them at a profit.What’s different today is the scale of the threat to global supplies: Relentless attacks on Russia’s energy infrastructure, outages at key plants in Asia and Africa and permanent closures across Europe and the US have removed millions of barrels of diesel and gasoline from the world market.On top of these real-world impacts are traders’ fears of what’s yet to come: imminent US sanctions on Lukoil PJSC and Rosneft PJSC and fresh European Union curbs on fuels made from Russian crude threaten already squeezed supply-chains.The result is ongoing pressure on costs at the pump despite a fall in global oil prices — something that’s unlikely to sit well with a US administration that sees “affordable energy” as essential.“Global refinery margins are astronomical,” said Eugene Lindell, head of refined products at consultancy FGE NexantECA. “The signal you’re giving the global refining system, no matter where the refinery is located, is to just run flat out.”In the US, Europe and Asia, margins are the highest they’ve been at this time of year since at least 2018, according to fair value data compiled by Bloomberg. The profits are so good that refiners’ stock prices are also surging: Processors including Valero Energy Corp and Turkiye Petrol Rafinerileri AS have seen stellar rises, while Orlen SA gained more than 100% year-to-date.While expectations of a glut are dragging on crude prices, disruption to the global refining system is limiting how much oil can be turned into products like gasoline, diesel and jet fuel. While that benefits the processors still running, it also means the slump in headline oil prices isn’t being felt at the pump.A constant stream of attacks on Russia’s refineries — just this month, Ukraine claimed strikes on the Saratov, Orsk and Volgograd plants — is hampering fuel production. Last month, Russia’s huge oil product exports were on course to hit a multi-year low, and that was before drone attacks damaged key loading facilities in the port city of Tuapse.Product supplies are being further squeezed by outages elsewhere. In Kuwait, the giant 615,000 barrel-a-day Al-Zour refinery recently had only one of its three crude processing units operating, while a key gasoline-production unit at Nigeria’s huge Dangote refinery is reportedly scheduled to halt for about 50 days of maintenance in coming weeks, having only recently begun restarting.Meanwhile, US crude runs in recent weeks have been more than a million barrels a day lower than the same time last year, a huge drop from the peak summer demand months, when processing was at its highest seasonal level since 2019. The country has seen multiple refinery closures in recent years, as has western Europe, further pressuring fuel supplies.“Global refining activity has been challenged by a series of unplanned outages in October, further constraining product markets and pushing margins even higher,” the International Energy Agency said Thursday. Increased profits have prompted the watchdog to raise its estimates for runs at margin-sensitive refining assets in Europe and Asia this month and next.In the US, the upshot is a rise in the average price of diesel since President Trump took office, and little change in the cost of gasoline, which on Thursday stood at $3.08 a gallon. Benchmark crude futures have meanwhile come off about 20% since his second inauguration, amid forecasts of a large surplus.Supercharging these ongoing real-world supply pressures are traders’ fears over what’s on the horizon.“The current strength in refining margins is at least partially being driven by uncertainty around the upcoming US sanctions on Rosneft and Lukoil, as well as the EU’s January prohibitions on Russian products,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group.FGE’s Lindell estimates Lukoil and Rosneft’s combined Russia oil product exports are more than 800,000 barrels a day. The global seaborne trade in oil products is about 22mn barrels a day, according to Clarkson Research Services Ltd., a unit of the world’s largest shipbroker.Any major disruption to those exports would be a shock to the global fuels market, though the extent to which those barrels would really disappear is unclear. Russia has shown that it often manages to work around sanctions.There are also questions about what comes next for refineries outside Russia in which Lukoil is involved, including Bulgaria’s Burgas facility, the Netherlands’ Zeeland plant and Romania’s Petrotel.Then there are the EU restrictions, coming into force January 21, which restrict the delivery of petroleum products made from Russian crude into the bloc. Precisely how these will end up impacting Europe’s diesel supplies from India and Turkey — both of which have also been key importers of Russian crude — remains to be seen.“The sanctions against Rosneft and Lukoil, on top of the recent sanctions package out of the EU, tightened the noose around Russia’s neck,” said Carolyn Kissane, an associate dean at the Center for Global Affairs at New York University, where she teaches about energy and climate change. “At the same time, you’re seeing more attacks driven by Ukraine against Russian infrastructure, which is a hit to the products market.”

Around 100,000 people were still without power in the northeastern Ukrainian region of Kharkiv, Kyiv authorities said Sunday, a day after Russia's latest attacks on energy infrastructure.Moscow, which has escalated attacks on Ukraine's infrastructure in recent months, launched hundreds of drones at energy facilities across the country overnight into Saturday.Some of these strikes affected the Kharkiv region, home to Ukraine's second biggest city, Restoration Minister Oleksiy Kuleba said."Time is needed to restart the equipment. Currently, around 100,000 consumers remain without electricity, water, and heating," Kuleba said.Ukraine's energy minister Svitlana Grynchuk said the wave of attacks, which killed four people, marked "one of the most difficult nights" for Ukrainian energy since the Russian invasion began.In the Poltava region, one of the most affected, power was mostly restored Sunday. But damaged equipment left parts of its main city still in the dark, local authorities said.State energy operator Ukrenergo implemented scheduled power cuts, allowing to balance the system, in most Ukrainian regions.Russia has targeted the power and heating grid throughout its almost four-year invasion, destroying a large part of the key civilian infrastructure.Moscow has switched tactics, striking simultaneously generation facilities, as well as power transmission and distribution systems, said deputy Minister of Energy Artem Nekrasov."This complicates the prompt restoration of normal power supply and the normal operation of the energy system," he said.As with previous waves of attacks, Russia's defence ministry said it struck "enterprises of the Ukrainian military-industrial complex and gas and energy facilities that support their operation."Ukraine has been responding with strikes on Russia's energy and oil facilities.Ukrainian strikes on energy infrastructure have left more than 20,000 people without power in several Russian border regions, local authorities said.Belgorod Governor Vyacheslav Gladkov said the "electricity and heating supply network has suffered severe damage" in the regional capital of the same name."Several streets are affected by power issues... More than 20,000 residents are without electricity," he said on Telegram.In the western Kursk region, "a fire broke out at one of the power plants in the village of Korenevo," cutting power to 10 localities, Governor Alexander Khinshtein said on Telegram.A fire also broke out at a heating facility in the southern Voronezh region, according to Governor Alexander Gusev.Russia's defence ministry, for its part, reported having shot down 44 drones over the border Bryansk region.Moscow launched 69 drones at energy facilities across the country overnight into Sunday, of which 34 were shot down, according to the Ukrainian air force.

A Russian attack hit Ukraine’s energy infrastructure, killing four people and prompting power cuts in several regions, Ukrainian authorities said Saturday.Moscow has in recent months escalated attacks on energy infrastructure in Ukraine, damaging natural gas facilities which produce the main fuel for heating in the country.Experts have said Ukraine risks heating outages ahead of the winter months.“Russian strikes once again targeted people’s everyday life. They deprived communities of power, water, and heating, destroyed critical infrastructure, and damaged railway networks,” Foreign Minister Andriy Sybiga said.Russia launched 458 drones and 45 missiles at Ukraine overnight, said the Ukrainian air force, adding that it had downed 406 drones and nine missiles.“In Dnipro, a Russian drone struck directly at a residential building; as of now, it is known that three people have died in the city. Sadly, there is also a fatality in Kharkiv,” President Volodymyr Zelensky said.Attacks forced emergency power cuts in the capital Kyiv and in the northern city of Kharkiv, authorities and energy company DTEK said.They also interrupted water supplies in Kharkiv, where the mayor said there was a “noticeable shortage of electricity.”There was no electricity, water, and partial heating in Kremenchuk, in the eastern Poltava region, the administration said.There were also significant train delays, Restoration Minister Oleksiy Kuleba said, accusing Russia of stepping up its attacks on locomotive depots.“We are working to eliminate the consequences throughout the country. The focus is on the rapid restoration of heat, light and water,” Prime Minister Yulia Svyrydenko said.The attack was the ninth massive attack on gas infrastructure since early October, energy company Naftogaz said.Russia has targeted Ukraine’s power and heating grid throughout its almost four-year invasion, destroying a large part of the key civilian infrastructure.As with previous waves of attacks, Russia’s defence ministry said it struck “enterprises of the Ukrainian military-industrial complex and gas and energy facilities that support their operation.”The attacks on energy infrastructure have raised concerns of heating outages in Ukraine as the war enters its fourth winter.Kyiv’s School of Economics estimated in a report that the attacks shut down half of Ukraine’s natural gas production. Ukraine’s top energy expert, Oleksandr Kharchenko, told a media briefing Wednesday that if Kyiv’s two power and heating plants went offline for more than three days when temperatures fall below minus 10 degrees Celsius, the capital would face a “technological disaster”.Ukraine has in turn stepped up strikes on Russian oil depots and refineries in recent months, seeking to cut off Moscow’s vital energy exports and trigger fuel shortages across the country.On Friday evening, drone attacks on energy infrastructure in southern Russia’s Volgograd region caused power cuts there too, governor Andrei Botcharov said on Telegram.

Four people, including two children, were killed, and two others were injured in a Russian attack on the Brovary district in Kyiv. According to the Ukrainian news agency (Ukrinform), Head of the Kyiv Regional Military Administration Mykola Kalashnyk indicated that Russian forces launched a massive missile and drone attack on cities last night, targeting energy infrastructure. Since the outbreak of the war in Feb. 2022, Russia and Ukraine issued near-daily reports of attacks and interceptions. Due to the conditions of the ongoing conflict, these claims cannot be independently verified.