Oil hits 4-month high after Ukraine's drone attack on Russian refinery, OPEC cuts; Brent at $87/bbl

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₹6,943/bbl on the multi commodity exchange (MCX). Also Read: Oil market oversupplied with record-high US output, Brent seen at $87-$92 for 2024: ShareKhan's Mohammed Imran -In Russia, exports are rising after Ukrainian drone attacks on the country's oil infrastructure putting pressure on oil prices. Traders assessed how Ukraine's recent attacks on Russian refineries would affect global petroleum supplies.

-Ukraine has stepped up attacks on Russian oil infrastructure this year, with at least seven refineries targeted by drones just this month. The attacks have shut down seven per cent, or around 370,500 barrels per day (bpd) of the Russian refining capacity, according to Reuters. -According to JP Morgan analysts, the attacks will likely reduce Russian crude runs by up to 350,000 bpd, in addition to scheduled maintenance closures.

This will boost US crude prices by $3 per barrel. The lower primary runs would lead to higher crude oil exports. Also Read: Explained | Why did OPEC+ members extend oil output cuts to mid-2024 -Russia will increase oil exports through its western ports in March by almost 200,000 bpd, against a monthly plan for 2.15 million bpd.

Even if the attacks do not lead to a direct loss of Russian crude supply, there is still a spillover effect for oil prices from surging refined product margins. -The Organisation of Petroleum Exporting Countries and its allies (OPEC+) led by Saudi Arabia and Russia agreed earlier this month to extend voluntary oil output cuts of 2.2 million bpd into the second quarter or mid-2024. Saudi Arabia, the de facto leader of the OPEC cartel, said it would extend its voluntary cut of one million bpd through the end of June.