Shelling of Russian refineries pushes oil prices up
The price of oil is quite sensitive to geopolitical factors; oil begins to rise even with the slightest threat of production cuts.
Recently, Ukraine has increased the number of attacks on the oil refining complex of the Russian Federation.
According to the Economic Truth , in 2024 alone, 13 oil refining complexes in Russia were damaged. Which is about 14% of the country's total capacity.
The role of oil refineries (ORPs) in oil pricing also cannot be underestimated. Refineries perform a critical function by converting crude oil into end-use products such as gasoline, diesel fuel and jet fuel.
The implications for the global supply of oil and its derivatives could be significant, given Russia's role as one of the world's largest exporters of oil and petroleum products. Reduced production capacity at Russian refineries could lead to reduced export supplies, increasing pressure on global supply.
In conditions of already existing shortages or limited supply, any shocks, such as shelling, can trigger an increase in prices for oil and petroleum products. This, in turn, can lead to an increase in the cost of energy resources for end consumers and increased inflationary processes in the global economy.
How did attacks on refineries affect oil prices?
As one would expect, the market did not keep itself waiting; over the past few months, the price of Brent oil has risen from 75 to 85 dollars per barrel:
It should be noted that the impact is not only from a reduction in product supply on the commodity market, but also from a purely psychological factor. Traders, receiving news about new attacks on refineries, begin to bullish.
The fact of influence is also confirmed by the US requests to the Ukrainian government to reduce the number of attacks on Russian oil refineries, as this increases the cost of oil and petroleum products.
But for now, the Ukrainian government does not agree to stop the attacks, since they correspond to the strategic interests of Ukraine.
Therefore, we should expect a further increase in oil prices after further attacks on Russian refineries. Moreover, a couple of years ago the maximum oil price was at $120 per barrel.
Observing current trends, the oil market continues to remain extremely sensitive to any geopolitical events, especially those affecting leading oil producing countries.
The shelling of Russian refineries raises the price of oil, forcing market participants to react actively to every news, which makes oil trading especially volatile .
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