🚨BREAKING: Russia faces oil production cuts after Ukrainian drone strikes on energy facilities.
Oil supply pressure is now coming from Russia as well.
Russia's oil production is taking a hit after Ukrainian drone strikes targeted key energy facilities, with at least 40% of its oil export capacity halted. The attacks on Baltic ports like Ust-Luga and Primorsk have disrupted shipments, forcing Russia to rely on Asian markets with limited capacity. This disruption comes as oil prices surge above $112/barrel, adding pressure on global supplies ¹ ².
The Ukrainian strikes have knocked out around 1 million barrels per day of Russia's export capacity, with some estimates suggesting production cuts are unavoidable. Russia's oil pipeline system is choked with oil, and storage is filling up, forcing some oilfields to reduce output. The Druzhba pipeline, which supplies oil to Hungary and Slovakia, has also been suspended
The impact is being felt globally, with gas prices jumping and concerns about inflation rising. The OECD warns that sustained high energy prices could hurt economic growth. Russia's oil revenues have dropped sharply, with weekly earnings falling to $1.44 billion from $2.45 billion
Ukraine's strategy aims to weaken Russia's economy and limit its ability to fund the war. President Zelensky has proposed a truce on energy targets if Russia stops attacking Ukraine's energy sector. Meanwhile, Russia is trying to find alternative export routes and adjusting processing schemes to minimize the impact
The situation remains volatile, with Ukraine vowing to continue targeting Russia's energy infrastructure.