At least three Russian oil refineries could face closures next year as declining exports, high crude oil costs and soaring interest rates lead to mounting financial losses, Reuters reported Friday, citing anonymous sources familiar with the matter.

The Tuapse refinery, a large but “relatively unsophisticated” facility owned by the state-backed oil giant Rosneft, has reportedly halted production multiple times this year. Smaller independent refineries, Ilsky in Krasnodar and Novoshakhtinsky in Rostov, have been operating at half capacity for months due to weak profit margins.

The struggling refineries, which are said to have sought financial support from the government, were also targeted in Ukrainian drone strikes this year. These disruptions have been compounded by the impact of Western sanctions, which force them to sell fuel at discounted rates.

“We expect that the actual [plant] closures may take place at the beginning of next year,” a source says.

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