Targeted strikes by Russia on oil extraction plants in Ukraine led to a halt in the purchase of oilseeds and a drop in prices

On Thursday, December 25, Russian drones again attacked the ports of the Odessa region, reported the Deputy Prime Minister for the Reconstruction of Ukraine – Minister of Community and Territorial Development of Ukraine Oleksiy Kuleba. As a result of the hit, the head of the guard died, two people were injured, the port infrastructure of several enterprises was damaged, and a fire broke out at the site of the strike.

On the night of December 24-25, the Illichivsk Oil and Fat Plant (IOZHK) of the Kernel company, one of the facilities of Ukraine’s agro-processing infrastructure, located in the city of Chornomorsk, was hit by Russian drones, Latifundist reported, citing the Kernel press service.

As a result of the UAV strike, a container with vegetable oil was damaged, which led to a large-scale fire and oil leak.

“The fire engulfed the production facilities of the enterprise, creating a serious threat to the infrastructure and personnel. The wreckage of the UAV also damaged part of the production unit. Work is currently underway to eliminate the consequences and assess the damage, in particular, the amount of lost oil is being clarified. Fortunately, none of the employees were injured,” the report says.

The company noted that this attack was the latest in a series of targeted Russian strikes on the port and oil refining infrastructure of the Odessa region in recent weeks. The shelling killed at least 9 people and injured dozens.

The attacks targeted storage, transshipment and processing facilities for agricultural products, including vegetable oil terminals and port infrastructure, including the assets of agro-industrial companies. The attacks led to the destruction and loss of thousands of tons of products, large-scale fires involving food cargoes — flour and oil — and created serious environmental risks for the Black Sea.

“Taken together, these strikes indicate a systematic and deliberate campaign to destroy Ukraine’s food and export infrastructure. It is clear that the Russian Federation is purposefully attacking facilities that ensure the production, storage and export of agricultural products, trying to cause maximum damage to the Ukrainian processing industry and creating risks for international logistics, the environment and the stability of supplies to dozens of countries around the world,” Kernel noted.

Amidst the targeted attacks, most oil extraction plants in the port area stopped receiving and purchasing sunflower, soybean, and rapeseed, which led to a sharp drop in prices at other plants.

During the week, sunflower purchase prices fell by 1,200-1,500 UAH/t to the level of 27,000-27,500 UAH/t with an oil content of 50% with delivery to the factory, rapeseed prices fell by 1,000-1,500 UAH/t to 22,700-23,000 UAH/t with delivery to ports and factories, and soybean prices fell by 800-1,000 UAH/t to 17,000-18,000 UAH/t with delivery to factories.

It should be noted that Russia benefits doubly from the attacks and shutdown of Ukrainian processing plants – it deals a blow to the Ukrainian economy and receives additional income from the increase in world prices for sunflower oil due to the shutdown of exports from Ukraine, which is already the second largest oil supplier in the world after the Russian Federation. The Russian Federation is also actively increasing the production and export of oil, displacing Ukrainian exporters from the traditional markets of India and China.