Drone Could Cause Jump In Oil Price
Ukrainian military forces have attacked one of the Lukoil refineries in Russia. According to Bloomberg, it processes 300,000 barrels a day. A significant interruption in Russian production could drive global crude prices up.
Russian Refineries
In March of last year, attacks on Russian refiners moved oil prices up almost 3% in a single day. CNBC said at the time, “The campaign of Ukrainian attacks this year has hit refineries representing 25% of Russia’s total refining capacity of 6.8 million barrels per day. About 50% of Russia’s refining capacity is within range of a Ukrainian drone attack.”
Crude oil prices have settled at about $71 recently, down from $80 in early January. The new Ukraine attack moved the price up about 1%.
In the early stage of the invasion, fears of low Russian production briefly drove oil prices to $133. The journal Nature pointed out that. “As the second-largest oil producer and natural gas exporter, Russia’s war with Ukraine has severely impacted the energy market.”
Worldwide Supply Problems
The danger of the attacks is that worldwide crude prices could rise quickly again. This would affect gas, diesel, jet fuel, and petrochemical prices, which means a chance it could begin to cripple businesses that rely on crude oil supply.
There is no perfect model for how much capacity severe attacks on Russian refineries would take offline. However, just a credible threat of a large interruption would push crude prices up;
More from ClimateCrisis 247
- By 2100, How High Will Summer Heat Get in America’s Largest Cities?
- Countries with The Highest Gas Prices, Some over 2x the US
- America’s largest Data Center Uses More Electricity Than Houston
- Most ER Visits Due To Heat Related Illness in the US From 2018 to 2025
