Biden takes action to hit oil prices, urges Ukraine not to bomb Russian oil facilities

The United States has urged Ukraine to halt attacks on Russian energy infrastructure, warning that drone attacks could push up global oil prices and trigger retaliation, according to three people familiar with the matter.

The above-mentioned people familiar with the matter told the Financial Times that the US government has issued multiple warnings to senior officials of Ukraine’s State Security Service (SBU) and its General Directorate of Military Intelligence (GUR). Since the full-scale conflict between Russia and Ukraine broke out in February 2022, both intelligence services have steadily expanded their drone programs to strike Russian targets on land, sea and air.

The White House is growing increasingly frustrated with Ukraine's brazen drone strikes, which have targeted refineries, terminals, warehouses and storage facilities across western Russia, damaging Russia's oil production capabilities, a person familiar with the matter said.

Washington is also concerned that if Ukraine continues to attack Russian facilities, including many hundreds of miles from the border, Russia could retaliate by attacking the energy infrastructure the West relies on. These include the Caspian Pipeline Consortium (CPC) oil pipeline, which transports oil from Kazakhstan via Russia to global markets. Western companies including ExxonMobil and Chevron use the pipeline, which was briefly shut down by Moscow in 2022.

A US National Security Council spokesman said:

"We do not encourage or support attacks on Russian soil."

Ukraine has recently stepped up its air strikes as its drone program expands and the ground war shifts in Russia's favour. At the same time, Ukraine has become increasingly dissatisfied with the West's ambiguous approach to curbing Russian energy revenues. A military intelligence official in Kiev said there have been at least 12 attacks on Russia's main oil refineries since 2022 and at least nine this year, while several docks, warehouses and storage facilities have also been attacked.

Helima Croft, a former CIA analyst who now works at RBC Capital Markets, recently pointed out that Ukraine's actions show that it has the ability to attack Russia Much of the oil export infrastructure in the west puts about 60% of the country's exports at risk.

Despite Western sanctions on its oil and gas industry, Russia remains one of the world's most important energy exporters. Oil prices are up about 15% this year, with Brent crude reaching about $85 a barrel. This has pushed up fuel costs in the United States, with gasoline prices in the United States rising nearly 15% this year to about $3.50 per gallon. This is not conducive to Biden, who is facing a difficult election.

Bob McNally, president of consulting firm Rapidan Energy and former White House energy adviser, said:

“Nothing scares a sitting U.S. president more than an election-year oil price spike.”

As technology advances, drone strikes in Ukraine have steadily increased. Ukrainian officials claim to have developed a drone with a range of more than 1,000 kilometers and a payload capable of causing serious damage. Last week, Kiev launched two of the largest and most widespread drone strikes, with the GUR and SBU successfully striking seven Russian energy facilities in consecutive days.

In the past year, GRU and SBU maritime drones have also attacked Russian ports, destroyed several Russian warships in the Black Sea, and attacked the Crimean bridge that Russia attaches great importance to. According to a Ukrainian official involved in planning and carrying out the attack, the purpose of the "special operation" was to hinder the Russian army's fuel supply and cut the Kremlin's military funding. Kiev also hopes to deliver a symbolic blow by drawing the fighting closer to Moscow and proving that air defenses, including those around the Kremlin, can be breached.

Some officials also view the air strikes as a ploy to get Washington to approve a $60 billion military aid package stalled by Congress that is critical to Ukraine's defense.

Article forwarded from: Golden Ten Data

标签： BOMB HIT OIL