RUSSIA Oil Refineries Close & Oil Prices Rise After More Drone Attacks. Ukraine Targets Russian Oil

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April 7, 2024

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Russia’s oil refinery network is under attack from Ukraine, with drone strikes targeting the country’s oil refineries. The latest attack, which hit a refinery over 800 miles from the Ukraine border, is the longest-range successful drone attack to date. Russia’s third-largest oil refinery, located in the Tartar region, was hit, with the strike affecting 340,000 barrels of oil per day, worth $34 million in daily output. This latest attack is significant, as it shows Ukraine has developed technology to attack oil refineries previously thought to be out of range. The attack on the refinery in Tartar has resulted in a significant financial loss for Russia, with the damaged refinery expected to be closed for a year, resulting in over $1.2 billion in lost revenue.

The Russian oil industry is facing significant challenges, with two major refineries currently shut down, one due to a flood caused by a burst dam, and another affected by the drone strike. The knock-on effect of these closures is a rise in global oil prices, with Brent crude oil prices increasing significantly over the last year. This can have a major impact on the global economy, with rising fuel prices feeding through into the cost of goods and services. The global price of oil is now expected to rise, potentially leading to a sustained period of high oil prices, which could push inflation back up and force central banks to re-evaluate their interest rate policies.

The situation is having a significant impact on the Russian economy, with the country’s oil revenues declining rapidly. The Russian government is under pressure to respond to the crisis, with speculation that President Putin may be forced to agree to a ceasefire to address the country’s financial challenges. The war in Ukraine has been a major drain on the Russian economy, with the latest attack on the oil refineries potentially the tipping point in persuading Putin to negotiate a peace settlement. The situation is closely watched, with the potential for further global economic disruption if the crisis is not resolved.