Oil Prices Slightly Altered Following Attacks on Russian Refineries

Written by Camilla Jessen

Mar.26 - 2024 10:45 AM CET

Photo: Shutterstock.com
Photo: Shutterstock.com
Oil prices fell slightly due to the effects of the recent attacks on Russian refineries.

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Oil prices were marginally changed on Tuesday after an increase the previous day, as investors weighed the effects of reduced Russian oil refining capacity due to recent Ukrainian strikes. Additionally, a slight weakening of the US dollar provided some support to prices, as reported by Reuters.

Brent crude dropped by 6 cents to $86.69 a barrel, and WTI crude futures fell by 4 cents to $81.91 a barrel.

Earlier, Brent had risen by 1.5%, and WTI by 1.6%, following the Russian government's directive for companies to reduce production in the second quarter to 9 million barrels per day, aligning with OPEC+ commitments.

Russia, among the world's top three oil producers and the largest exporter of petroleum products, is grappling with the aftermath of recent Ukrainian attacks on its refineries. According to Goldman Sachs analysts, these strikes have incapacitated about 900,000 barrels per day of capacity, with some damages possibly lasting weeks or becoming permanent.

"The impact of oil refining disruptions on oil prices is mixed: a decrease in refinery demand negatively affects prices, while a potential reduction in Russian oil exports has a positive impact," the analysts stated.

Following a Ukrainian drone attack on Saturday, Russian oil company Rosneft ceased operations at a 70,000-barrel-per-day facility at its Kuibyshev refinery in Samara.

The long-term consequences of these attacks and Russia's production reduction are still uncertain. However, the recent slight weakening of the US dollar has provided some support to oil prices.