Oil Markets Weekly: Meanwhile in Russia...

Research evidence excerpt

Oil Markets Weekly: Meanwhile in Russia...

Natasha Kaneva AC Global Markets Strategy

(1-212) 834-3175 09 July 2026 J P M O R G A N

natasha.kaneva@jpmorgan.com

The second source of uncertainty is China. Chinese refinery runs are down an astonishing 3.0 mbd, driven primarily by policy

decisions rather than economics. A normalization will likely require more than simply reopening Hormuz. It will require

confidence that flows have fully stabilized and are no longer subject to repeated interruptions. Only then can we expect Beijing to

fully ease refined product export quotas, allowing major state-owned refiners to raise utilization rates and increase crude imports.

In our view, that process is unlikely to be complete before September.

The third, and perhaps the least appreciated source of uncertainty is Russia.

Russia’s refining system has spent the last three months absorbing repeated Ukrainian drone strikes that have damaged refineries,

storage facilities, and increasingly the complex secondary conversion units that determine product yields. Russian refinery runs

have fallen to 3.8 mbd in June, 1.5 mbd below the start of the year, making Russia one of the largest contributors to today’s

exceptionally weak global refining activity (Figure 1). Russia alone accounts for roughly 20% of the 8.2 mbd decline in global

refinery runs this year.

Domestically, Russia’s fuel situation has deteriorated and is increasingly becoming an operational rather than merely a

consumer issue. Shortages are spreading even to regions with their own refineries as supplies are redirected toward Moscow.

This reflects a clear shift in Ukrainian targeting: refineries supplying the capital accounted for 39% of all attacks in 2026, up from

22% in 2025 (Figure 2).