• Oil & Gas - News
  • Updated: April 02, 2024

Brent crude tops $89 amid Ukrainian strikes, middle east tensions

Brent crude tops $89 amid Ukrainian strikes, middle east ten

For the first time since October, the global oil benchmark Brent hit $89 a barrel on Tuesday, if only momentarily, as rising Middle Eastern tensions and new attacks by Ukraine on Russian energy facilities threatened to disrupt oil supply.

June delivery Brent futures touched a high of $89.08 and were up $1.15, or 1.3%, at $88.57 a barrel by 13:33 GMT.

The May contract for U.S. West Texas Intermediate (WTI) oil increased by $1.34, or around 1.6%, to $85.05 following a top of $85.46, which was also the highest since October.

In an attack that Russia first claimed to have thwarted, a Ukrainian drone attacked one of the country's largest refineries on Tuesday.

According to a Reuters examination of photographs depicting the aftermath of the strike, it targeted the refinery's major oil refining unit, which accounts for almost half of the plant's entire yearly production capacity of 340,000 barrels per day.

Russia, one of the world's top three oil producers and exporters of oil products, has been dealing with a wave of Ukrainian attacks against its oil refineries, as well as its own attacks on Ukrainian energy infrastructure.

In the Middle East, Iran has threatened vengeance on Israel for an airstrike that killed two of its senior generals and five other military advisers at the Iranian embassy in Damascus.

Israel has been at war with Iran-backed Palestinian group Hamas in Gaza, but direct Iranian involvement may start a "region-wide conflict with a plausible impact on oil supply," according to Tamas Varga of oil brokerage PVM.

Meanwhile, an environmental organisation reported on Tuesday that a European satellite had detected an oil spill in the northern Caspian Sea near Kazakhstan's massive Kashagan oilfield.

Markets are also anticipating Wednesday's ministerial panel meeting of the Organisation of Petroleum Exporting Countries (OPEC) and its partners, generally known as OPEC+. OPEC+ sources told Reuters that the panel is unlikely to endorse any changes to oil output policy.

Meanwhile, the demand outlook improved when March statistics revealed an increase in Chinese manufacturing activity for the first time in six months and in the United States for the first time in a year and a half.

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