BY SRH
As we approach winter in the Northern Hemisphere, there is a convergence of military conflicts, economic battles, and resource wars.
The global economy is already feeling the pinch from export limits on energy and vital resources, and there’s a real possibility that supply disruptions and retaliatory actions may exacerbate existing disputes. Concerns about possible spillover from active conflict zones are high since there is no obvious way to de-escalate the situation.
So far this morning, the most important thing that has happened is that a Moscow refinery was hit by a drone strike that Ukraine launched overnight. This happened despite President Trump’s appeal that Ukraine stop attacking Russian energy infrastructure, as the global refining crisis intensifies.
Drones attacked the Moscow Oil Refinery, which is operated by Gazprom Neft and is located approximately 16 miles from the Kremlin, according to Bloomberg. The plant provides fuel to the neighboring metropolitan area and can process about 245,000 barrels per day.
“One of Russia’s key oil industry facilities and the aggressor’s logistics facility were hit,” Ukrainian President Volodymyr Zelenskyy tweeted on X. Money like this keeps the war machine running. Palianytsia, Vendetta, Liutyi, Bars, Flamingo, Sichen, and Pelican were among the systems utilized.
Due to tighter availability of the industrial fuel that runs the global economy, diesel, futures and refining spreads hit record highs last week as supply issues in the Gulf and Russia worsened.
The situation is getting worse as new export restrictions or expansions of current ones are being considered. Senate Majority Leader John Thune told reporters on Tuesday that he was “open to exploring” the possibility of a US diesel export restriction, while a report surfaced on Tuesday claiming that Moscow was contemplating the extension of its fuel export embargo.
Refining spreads were subject to an even tighter squeeze. Bloomberg data dating back to 2009 shows that the US heating oil crack, which is a measure of the spread between fuel and crude prices, reached a record high of $117 a barrel on Wednesday.
Mike McGlone, a senior commodity strategist at Bloomberg Intelligence, has issued a warning about the diesel price spike, comparing it to comparable movements in gasoline during the energy crisis of 2008.
