Rising global instability has pushed oil prices to a five-month high. Brent crude hit $89 a barrel on Tuesday, a day after a suspected Israeli airstrike on Iran’s embassy in Syria, says Anna Cooban on CNN. The attack “raises the spectre that the war between Israel and Hamas in Gaza will spill over” into a wider regional conflict.
“The war in Gaza has not significantly disrupted oil supply so far,” says Bill Weatherburn of Capital Economics. However, “markets are clearly worried that an escalation in the conflict could come to involve the major oil-producing countries in the region”.
Meanwhile, a concerted campaign of Ukrainian drone attacks on Russian oil hubs and refineries is jeopardising Russian energy output, says Isabel van Brugen in Newsweek. The strikes have taken an estimated 14% of Russia’s national refining capacity offline, forcing Moscow to ban exports of petrol and diesel and import fuel from neighbouring Belarus to fill the gap. Energy exports account for 30% of the Russian state’s budget revenues and “are crucial” for funding the country’s war machine.
“We are going to focus on where it hits [Russia] the hardest, and that’s financial resources,” Francisco Serra-Martins of Ukrainian drone firm Terminal Autonomy tells Bloomberg. “Russia is a gas station with an army, and we intend on destroying that gas station.”
Opec+ caps supply
While Russia is still exporting crude oil, this is being limited as part of a deal with Opec+. The oil producers’ group, which covers around 40% of global production, last year agreed to cut its collective output by 2.2 million barrels per day in a
