While there is a temporary ceasefire between the United States and Iran, conflicts ongoing in two different corners of the world have pushed the global order and energy markets into a crisis. Ukraine has struck deep inside Russia, targeting its oil infrastructure, while on the other hand, in West Asia, Israel has continued its military operations in Lebanon despite the ceasefire.
These two major military events have suddenly caused a stir in the international oil market. Ukrainian President Volodymyr Zelenskyy has claimed that his military has carried out a major attack on the Lazarevo oil pumping station located in Russia’s Kirov region. This area is located inside Russia, approximately 1,287 kilometers from the Ukrainian border.
After this drone strike, huge plumes of smoke were seen rising into the sky. The Governor of Kirov also acknowledged that an oil facility was affected by this attack. According to the Ukrainian President, their objective is to destroy the main supply lines that fuel Russia’s war machinery.
Additionally, a refinery in Russia’s Saratov, the Rostov region, and a military base on the Caspian Sea coast were also targeted. Following an attack on an oil depot in Rostov, an emergency had to be declared, where a massive fire spread over an area of more than 4,000 square yards.
On the other hand, tension in West Asia has once again reached its peak. Even after about six weeks have passed since the ceasefire declared in April, Israel has ordered an expansion of its military operations in Lebanon. The ongoing conflict between Hezbollah and Israel shows no signs of stopping, with constant attacks from both sides.
Despite the US hosting peace talks between the two parties, the situation on the ground continues to deteriorate, increasing the risk that Iran could once again directly jump into this war. The fire of war raging on both these fronts has had the most direct and significant impact on the global oil market. As the market opened on the first trading day of the week, a sharp jump of more than 2 percent was recorded in crude oil prices.
In the international market, Brent crude rose to $93.05 per barrel and US WTI crude reached $89.53 per barrel. Market analysts believe that if the conflict in Lebanon intensifies further or if oil supply through the Strait of Hormuz is disrupted, the global energy crisis could deepen further in the coming days.
