The Bottom Line Upfront
Ukraine has launched a series of drone attacks on Russian oil refineries, despite pleas from the White House to stop. The attacks have raised concerns about the impact on crude markets and the potential for higher pump prices in the United States.
As the U.S. prepares for Presidential Elections in November, crude oil prices will contribute a political factor as well as impact the American economy, which Moody's economist warns is, at the time of an early April analysis, the "number one" recent risk factor presented to the U.S. economy.
The Breakdown
The drone attacks on Russia's energy infrastructure have the potential to disrupt global oil prices, increase inflation, and put pressure on the Biden administration ahead of the elections.
- Ukrainian suicide drones have targeted Russian oil refineries, damaging facilities in Smolensk and Lipetsk regions.
- The attacks were carried out by drones in the service of the Security Service of Ukraine (SBU), according to a source in the Ukrainian defense sector.
- The Biden administration recently signed a military aid package for Ukraine, but the attacks on Russian energy sites have continued.
- Long-range drones have reportedly hit at least 20 energy facilities in Russia this year, causing concerns about the stability of Russia's oil production and exports.
