Oil Prices Rise as Middle East Tensions Escalate

Escalating tensions in the Middle East and new targeted Ukrainian drone attacks on Russian energy infrastructure have caused a spike in oil prices, which rose to their highest level since October on Tuesday.

On Tuesday, Ukraine struck one of Russia’s largest oil refineries with a drone attack on the highly industrialized Tatarstan region southeast of Moscow. The drones hit a core unit which processes about 155,000 barrels per day of crude. According to Reuters, as of the end of March, around 14% of Russia’s primary oil refining capacity had been knocked out by Ukrainian drone attacks.

In the Middle East, Iran has vowed revenge on Israel after an Israeli airstrike killed two of its top generals and five other military advisers at the Iranian embassy in Damascus.

Tamas Varga, an analyst at oil broker PVM said in a research note on Tuesday, “The new week, the new month and the new quarter was greeted with escalating tension in the Middle East with indirect Iranian involvement.”