In an Easter Sunday interview in 20+ Polish papers [POLISH & ENGLISH below], I said White House reasons for Ukraine not to hit Russian refineries don’t make sense. The “elephant in the room” alarming DC is that Ukraine can now disrupt Primorsk, UST-Luga and Novorossiskya oil ports, needed for 60% of Russian exports.
This would not only deny Moscow vital oil revenues needed to wage war, it would also spark a spectacular global oil market shock. I explain that the USA and allies can urgently prepare for this, while the Ukrainians are still maintaining strategic patience.
1. “Rosja może wziąć odwet na Zachodzie za ukraińskie ataki na rafinerie”
Bankier.pl 1 day ago — “Rosja może wziąć odwet na Zachodzie za ukraińskie ataki na rafinerie“. 2024 … PAP Thomas O’Donnell, ekspert ds. energetyki … Ukraina uderza w …
2. Analityk: Ukraina pokazała, że może zakłócić eksport …
GospodarkaMorska.pl 1 day ago — … PAP Thomas O’Donnell, ekspert ds. energetyki … Ukraina uderza w rafinerie ropy naftowej, a nie w infrastrukturę eksportową. … Forum Transportu …
3. Ukraina ma asa w rękawie? “To byłby zwrot, który niepokoi …
Money.pl … ocenił Thomas O’Donnell, ekspert ds. energetyki z amerykańskiego think tanku Wilson Center. … “To byłby zwrot, który niepokoi Waszyngton”. MLG.
4. Analityk: Ukraina pokazała, że może zakłócić eksport …
wnp.pl 1 day ago — … PAP Thomas O’Donnell, ekspert ds. energetyki. … Zapraszamy do udziału w tegorocznym Europejskim Kongresie Gospodarczym (7-9 maja 2024).
5. Ukraina pokazała, że może zakłócić eksport rosyjskiej ropy …
Portal Morski Ukraina pokazała, że może zakłócić eksport rosyjskiej ropy … z PAP Thomas O’Donnell, ekspert ds. energetyki z amerykańskiego think tanku Wilson Center.
6. Ukraina pokazała, że może zakłócić eksport rosyjskiej ropy …
pb.pl Ostatnie ataki ukraińskich dronów na … opublikowano: 2024-03-31 17:45 … PAP Thomas O’Donnell, ekspert ds. energetyki z amerykańskiego think tanku Wilson …
6. Analityk: Ukraina pokazała, że może zakłócić eksport …
portalsamorzadowy.pl 1 day ago — … – ocenił w rozmowie z PAP Thomas O’Donnell, ekspert ds. energetyki z amerykańskiego think tanku Wilson Center.
8. Analityk: Ukraina pokazała, że może zakłócić eksport …
Radio Opole 2024-03-31, 08:30 Autor: PAP. Analityk: Ukraina pokazała … PAP Thomas O’Donnell, ekspert ds. energetyki z amerykańskiego think tanku Wilson … Ukraina uderza w rafinerie ropy naftowej, a nie w …
18 hours ago Ukraina pokazała, że może zakłócić eksport rosyjskiej ropy przez porty
day ago Portal Morski
9. Ukraina zaatakowała Krym? Rosjanie zamykają most na …
10. Ukraina pokazała, że może zakłócić eksport rosyjskiej …
wnp.pl 18 hours ago — Thomas O’Donnell, ekspert ds. energetyki z amerykańskiego think tanku Wilson Center W rozmowie z PAP przypomniał doniesienia brytyjskiego …
11. Ukraina zakłóci eksport rosyjskiej ropy? Analityk wyjaśnia
TVP Info 1 day ago — … Thomas O’Donnell, ekspert ds. energetyki z … Ukraina uderza w rafinerie ropy naftowej, a nie w infrastrukturę eksportową. … PAP/EPA/MOHAMED …
12. Polska Agencja Prasowa SA
Polska Agencja Prasowa SA Ostatnie ataki ukraińskich dronów na rafinerie w Rosji pokazały, że Ukraina … PAP Thomas O’Donnell, ekspert ds. energetyki z … Sprawdź naszą politykę …
13. GospodarkaMorska.pl – portal morski, portal gospodarczy
GospodarkaMorska.pl Ostatnie ataki ukraińskich dronów na rafinerie w Rosji pokazały, że Ukraina … PAP Thomas O’Donnell, ekspert ds. energetyki z … Paweł Tarnowski rekomendowany do …
14, Ukraina oskarża Rosję o użycie ciężkiej bomby …
Bankier.pl 2 days ago — … PAP Thomas O’Donnell, ekspert ds. energetyki z amerykańskiego think tanku Wilson Center. Wideo dnia. ZAMKNIJ. Najpopularniejsze na rynkach.
15. Puls Dnia – wiadomości, notowania, inwestycje, giełda, …
pb.pl … PAP Thomas O’Donnell, ekspert ds. energetyki z amerykańskiego think tanku Wilson Center. czytaj więcej. 31-03-2024, 18:15. Analityk: Ukraina pokazała, że może …
16. Notowania Brent Crude Oil Spot – Ropa Brent (BZ.FUT)
BiznesRadar … PAP Thomas O’Donnell, ekspert ds. energetyki z amerykańskiego think tanku Wilson Center. bankier.pl | 2024-03-31 11:42:24 | Gospodarka | Polecam! | …
17. Notowania CL.FUT (CRUDE OIL) – Ropa naftowa
BiznesRadar 4 days ago — bankier.pl | 2024 … Ostatnie ataki ukraińskich dronów na rafinerie w Rosji pokazały, że Ukraina … PAP Thomas O’Donnell, ekspert ds. energetyki …
18. Pogoda, Sport, Polska, Kuchnia, Media, Wiadomości …
MSN – Ostatnie ataki ukraińskich dronów na rafinerie w Rosji pokazały, że Ukraina … Thomas O’Donnell, ekspert ds. energetyki z … PAP · 5 dni temu 116 lat temu …
Ukraine drone strikes on Russian refineries: What is Washington really alarmed about?
Created from interview by Arthur Ciechanowicz, PAP Brussels, with Dr. Thomas O’Donnell, Global Fellow, Wilson Center, Washington (resident in Berlin),
27 March 2024
The Financial Times reported that the USA repeatedly urged Ukraine to stop drone strikes on Russian refineries. One reported worry is possible retaliation against western energy facilities. The other is that Ukraine will drive up gasoline prices — something presidents are laser-focused to prevent in an election year.
However, to me this is all a bit strange.
The USA has always supported Ukraine’s right to attack inside Russia if it does not use USA weapons. Indeed, Kyiv makes these drones itself. Of course, in principle, Putin could retaliate against NATO energy facilities; however, this would be a huge gamble for Moscow.
This risk seems insufficient for the USA to publicly urge Ukraine to stop.
What about oil prices?
Ukraine is hitting oil refineries, not oil-export facilities. Hitting refineries cuts production of diesel, gasoline and aviation fuel for Russia’s war economy and its armed forces in Ukraine. Two things can happen when Russia cannot refine this oil.
First, Russia can stop producing this oil. However, this is oil that was not being exported, so this would not reduce oil exports nor drive prices up. However, Russia also exports refined products, which could be reduced, but this is less problematic for prices as other producers step in.
Second, Russia could export whatever oil it can no longer domestically refine. However, this puts new oil on the global market, oil that was not exported before, reducing global prices.
These are things the USA, the world’s number-one oil producer, understands. So, what is the USA really worried about?
The elephant in the room, one the USA doesn’t want to even mention aloud, is that the Ukraine’s newly demonstrated capacities against refineries simultaneously demonstrate that, whenever Kyiv choses to do so, it can disrupt perhaps half of all Russian oil exports by also striking ports.
This sudden development is what really alarms Washington.
To be specific, there are two key oil-export ports for western Russia: Primorsk, north of St. Petersburg, at the terminus of the Baltic Pipeline, and Novorossiskya, on the east shore of the Black Sea, east of the Sea of Azov.
Ukraine has now demonstrated that both these ports are within range of its aerial drones. Note too, Ukrainian sea drones recently sunk a Russian landing ship on the East side of the Crimean Peninsula, meaning they might also be able to strike Novorossiskya oil exports by sea.
If tomorrow Kyiv decides to hit these oil ports, this would both slash Russian oil revenues for financing its war and could indeed also spike global oil prices for a protracted period, perhaps as strongly as during 2003-08, with severe consequences.
However, crisis could be mitigated or prevented if Ukraine gives the USA, UK and EU time to prepare. The real USA alarm must be that Ukraine could begin this before non-Russian oil-producing countries and international oil corporations had time to understand what is coming and to increase production to take over Russia’s lost market share.
Ukraine’s destruction of Russian oil port facilities can be a force-multiplier to the till-now often ineffectual and overly complex oil-price-cap strategy that has aimed to reduce Russian oil revenues without risking any reduction in Russian oil exports. The oil-price cap could help prevent Russia making up for export volumes it losses by reaping proportionally higher prices.
We know there are plenty of undeveloped oil reserves outside Russia to completely replace Russian oil exports. Washington, London, Warsaw and other EU capitals should act rapidly. Kyiv cannot afford to be patient.
I’ll add some further data & reading:
2/ Bloomberg summary with data/charts of effects of Ukrainian strikes on refineries, range of drones, price rises within Russia, etc.
3/ In The True Direct Cost of Oil Sanctions on Russia’s Exports (by Julian Lee and Alaric Nightingale, at Bloomberg), this chart below shows the very limited effect of the USA-UK-EU price-cap sanctions scheme on undermining Russian revenues. This means, the new Ukrainian drone capacity is clearly what is required if these revenues are to really be undermined. – T.O’D. )
The Global Barrel 