Smoke billows after Ukraine’s SBU drone strikes a refinery, amid Russia’s attack on Ukraine, in Ryazan, Ryazan Region, Russia, in this screen grab from a video obtained by Reuters, March 13, 2024.
Crude oil futures rose Monday as Ukrainian drone strikes disrupt Russian refining capacity and Moscow orders output cuts to meet OPEC+ targets.
The West Texas Intermediate contract for May gained $1.32, or 1.64%, to settle at $81.95 a barrel. The Brent contract for May added $1.32, or 1.55%, to settle at $86.57 a barrel.
Russia has ordered companies to cut oil output to meet Moscow's commitments to OPEC+, industry sources told Reuters Monday. Several OPEC+ countries have agreed to voluntary production cuts totaling 2.2 million barrels per day through the second quarter.
A Ukrainian drone attack caused a fire at the Kuibyshev oil refinery in the city of Samara over the weekend. Industry sources told Reuters that one of the major refining units at the facility was knocked out after the assault.
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Kyiv has launched a campaign of strikes against Russian energy infrastructure since the start of the year with Ukrainian intelligence claiming a dozen facilities have been successfully hit. At least 10% of Russia's refining capacity has been disrupted by the attacks, according to British intelligence.
"Depending on the extent of the damage, major repairs could take considerable time and expense," the British Ministry of Defense said in an update over the weekend.
