Global energy trembles: Ukrainian strikes on Russian oil may spike prices

Pentagon Chief Lloyd Austin said on Tuesday in Congress that Ukrainian attacks on refineries may have consequences for the global energy market situation. He also suggested that Ukraine focus on targets directly impacting the current fight.

Austin referred to the Ukrainian strikes on Russian refineries during a budget hearing in the Senate Armed Services Committee.

Certainly, these attacks could have a domino effect on the global energy situation, said the defense secretary.

- I think Ukraine is better served when going after tactical and operational targets that can directly influence the current fight, he added.

Austin's comments are an indirect confirmation of reports by the "Financial Times" that the US administration is pressuring Ukraine to stop attacking Russian oil infrastructure facilities, fearing an increase in oil prices.

At the same time, the Secretary of Defense once again argued for the necessity of approving additional support for Ukraine. As he argued, Vladimir Putin is trying to fully exploit the current deadlock and break in support for Kyiv. He also added that the US will make an effort to break the bubble created by Putin that blocks aid to Ukraine.

Austin also referred to the situation in Gaza, repeating that Israel must significantly increase the flow of humanitarian aid to Palestinians to prevent mass starvation. As he added, famine "will accelerate violence and ensure long-term conflict" and only empower terrorists. He also assessed that there is no evidence that Israel's actions in the Gaza Strip constitute genocide.

Reuters estimates that the processing capacity of Russian refineries, taken out of service in the first quarter of 2024 due to drone attacks, amounted to about 4.6 million tonnes of crude oil (averaging around 33,000 tonnes per day), equivalent to about 7% of the processing capacity of all plants in the country.

Crude oil broke through the £70 per barrel level at the end of last week. Many indications suggest that this trend will not stop.