A pause removes one source of supply risk for refined products, particularly diesel and other Russian fuel exports, and could take some pressure off product cracks and distillate prices in the near term. The effect on crude is likely smaller, since energy experts attribute high oil prices mainly to the US-Iran war. Disruption to Gulf shipping remains the dominant driver of Brent. The pause is informal and expected to be temporary, so traders may treat it as a short reprieve rather than a structural change. A resumption after the midterms would put the risk premium back into products.
—
Earlier:
- Vessel on fire in Strait of Hormuz after incident near Oman, cause “unknown” (LOL)
- ANZ lifts year-end Brent forecast to $105 as tight physical market persists
—
Kyiv has quietly put its most effective economic weapon on hold until America votes, and Russia’s refineries get a breather while Ukraine’s power grid doesn’t.
Summary:
- Ukraine has paused strikes on Russian oil refineries, people familiar with the operations said
- The informal pause began early last week and is expected to last until after the US midterms, possibly longer
- Zelensky says forces have been more cautious but have not been ordered to stop
- Trump has blamed the strikes for high fuel prices, which experts mostly attribute to the US-Iran war
- The pause coincided with a Starlink dispute; US officials say the two issues weren’t linked
- Russia continues to escalate attacks on Ukraine’s energy infrastructure
Ukraine has paused its drone strikes on Russian oil refineries following weeks of pressure from US President Donald Trump, according to a report in The Wall Street Journal (WSJ is gated) citing people with knowledge of the operations.
The unofficial pause began early last week and is expected to last at least until after the US midterm elections on Tuesday, and possibly further into November, the newspaper reported. Ukraine’s government has not announced any halt. Units carrying out long-range strikes were told in mid-October that the refinery campaign was effectively on hold once missions already under way were completed, according to two military officials cited in the report.
President Volodymyr Zelensky said this week that Ukrainian forces had been more cautious recently but had not been ordered to stop hitting refineries, and that drone units were striking other targets inside Russia. The last reported attack on Russian oil infrastructure was on 20 October, on a pumping station on the Druzhba pipeline.
The Journal reported that Trump has pressed Kyiv to stop the strikes, blaming them for high global fuel prices, which energy experts mostly attribute to the US-Iran war. Republican candidates are concerned fuel costs could hurt them in the midterms, and the administration has eased sanctions on Russian diesel. A US envoy repeated the demand for a pause at a meeting with Zelensky in Oslo on 20 October, according to US officials cited in the report.
The pause coincided with a dispute over Ukraine’s access to Starlink satellite internet, which was restricted in mid-October and fully restored on 24 October after Trump asked Elon Musk to lift the limits. US officials said the two issues were not linked, while some Ukrainian officials described heavy pressure to give Washington a win. European officials also advised Kyiv to take account of the political sensitivity of energy prices before the vote, the report said.
Zelensky has sought something in return for halting the strikes, with a mutual energy ceasefire with Russia his preferred option, but those proposals made little progress. Meanwhile, Russia has continued to escalate missile and drone attacks on Ukraine’s energy infrastructure and cities.
This article was written by Eamonn Sheridan at investinglive.com.