On one hand, the war between Iran and Israel continues. At the same time, Russia has suffered a major blow. According to Reuters report, at least 40% of Russia’s oil export capacity has been shut down after Ukraine’s drone strikes, a disputed attack on a major pipeline and the seizure of tankers.
This blockage is the most serious oil supply problem in Russia’s modern history. Russia is the world’s second-largest oil exporter and the blockage has dealt a blow to Moscow at a time when oil prices have soared above $100 a barrel due to the Iran war. Russia’s oil production is one of the main sources of earnings for the national budget and is vital to its $2.6 trillion economy.
Ukraine increased attacks
Ukraine has intensified drone attacks on Russia’s oil and fuel export infrastructure this month. These attacks targeted all three of Russia’s major western oil export ports, including Novorossiysk on the Black Sea and Primorsk and Ust-Luga on the Baltic Sea.
According to Reuters calculations, about 40% of Russia’s crude oil export capacity, or about 2 million barrels per day, had been shut down as of Wednesday after the most recent attack. This includes Primorsk and Ust-Luga, as well as the Druzhba pipeline, which runs through Ukraine to Hungary and Slovakia.
Kiev has also targeted the pipeline’s oil pumping stations and refineries. Kiev says its aim is to reduce Moscow’s income from oil and gas. Which accounts for about one-fourth of Russia’s government budget income and aims to weaken its military strength. Russia says that these attacks in Ukraine are terrorist attacks, and it has tightened security in its 11 time zones.
Ports, Pipelines and Tankers
Ukraine said part of the Druzhba pipeline was damaged by Russian attacks in late January, prompting both Slovakia and Hungary to demand Kiev immediately resume supplies. The Novorossiysk oil terminal, which has the capacity to handle up to 700,000 barrels of oil per day, is not able to load oil as planned after it was damaged by a major Ukrainian drone strike earlier this month.
In addition, traders said that due to repeated seizures of tankers belonging to Russia in Europe, 300,000 barrels per day of Arctic oil exports from Murmansk port have been disrupted. Faced with threats to its export routes to the West, Moscow is forced to rely on oil exports to Asian markets, but traders say these routes are limited due to a lack of capacity.
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