Lukoil reduces gasoline production. "The first big victim of sanctions"

Russian oil giant Lukoil has been compelled to significantly reduce gasoline production at its Nizhny Novgorod refinery by half. The Moscow Times reported that the cause of this situation was the breakdown of foreign equipment, which cannot be swiftly replaced due to Western sanctions.

According to "Kommersant," the malfunction occurred on January 4, 2024. The affected equipment is a compressor that cannot be promptly replaced. The reason lies in the limitations imposed by Western sanctions, hindering the acquisition of new equipment. Nevertheless, Lukoil plans to repair the damaged equipment by spring this year.

Another setback for Lukoil

As per "Kommersant", Lukoil "has become the first major casualty of Western sanctions in the oil industry".

The Nizhny Novgorod refinery, where the malfunction took place, processed 15 million tons of oil in 2022, representing approximately 5 percent of the total national oil production. However, as emphasized by "Kommersant", these plants are crucial for the fuel supply of the Moscow region, which accounts for around 30 percent of nationwide gasoline consumption.

Recall: In December 2023, Lukoil faced a significant blow from Bulgaria. Due to its reliance on Russian oil, Bulgaria was given until the end of 2024 by the European Union to sever ties with Russian raw materials, one of the sources financing Vladimir Putin's military actions in Ukraine. The EU sanctions aim to cut off this fuel supply to the Russian army.

As reported by Bloomberg and AFP at the time, the Russian company declared that it was contemplating the sale of its Neftohim refinery in Bulgaria on the Black Sea coast, the largest in the Balkans.

"Due to a significant change in the operating conditions of Lukoil Group companies in Bulgaria, the company has initiated a review of its strategy regarding this asset. Various options will be considered, including the sale of the enterprise"
the company stated in a special announcement.