Another Russian oil refinery hit by Ukrainian drone
Brent prices have gained after Ukraine launched a series of drone attacks on Russian oil facilities over the weekend.
PHOTO: An oil pumpjack with the Russian flag in the background. Getty Images
Ukraine allegedly launched around 35 drones across Russia over the weekend, coinciding with the final two days of Russia’s 2024 presidential election, the Russian Ministry of Defence said in a statement.
An oil refinery at the Slavyansk refinery in Krasnodar, Russia, caught fire on Sunday after being hit by a Ukrainian drone, the ministry stated.
These latest attacks have added upward pressure on Brent’s prices, highlighting the oil market's susceptibility to geopolitical tensions and supply interruptions, SPI Asset Management’s managing partner Stephen Innes said.
Russia took down 17 drones over the southern Russian region of Krasnodar, four over Moscow, and the rest over six other regions, the ministry said. "The drones were neutralised, but a fire broke out as a result of the fall of one of the devices," the operational headquarters of the Krasnodar region in southern Russia said in its official Telegram channel.
"The market will be tracking Ukraine-Russia tensions closely this week," said two market analysts from ING Bank.
Persist attacks by Ukraine dents Russia's refining capacity
The Slavyansk oil refinery, located 70 km north of Krasnodar, processes about 4.5 million mt of crude oil every year, translating to about 90,000 b/d, Reuters reported. It produces fuel mainly for exports.
"The market was rattled by a series of at least five drone strikes on the Russian refining complex, resulting in the shutdown of some of the country's largest crude processing facilities," Innes said.
Refining operations were shut as a result and the fire was extinguished eventually, however, there was one casualty due to a heart attack, the report added. Two other energy facilities in western Russia were attacked by drones last week, Russian officials said.
Last week, a crude oil processing unit at one of Russia’s biggest energy firms, Lukoil’s Kstovo refinery in Nizhny Novgorod caught fire after a drone struck the compound, Russian governor Gleb Nikitin shared on Telegram.
Another drone struck a fuel and energy facility in the Oryol region, Russian governor Andrey Klychkov said on Telegram. One of the oil reservoirs at the oil depot caught fire because of this attack, state-owned media agency TASS reported.
"Ukrainian drone attacks took out three Russian refineries last week, which account for 12% of Russia’s total oil processing capacity. This has seen refinery margins pick up amid tighter availability of oil products in Europe," said INZ Bank’s senior commodity strategist Daniel Hynes.
By Aparupa Mazumder
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