Oil Prices and Strikes on Refineries: Expert Names a Likely Reason for an Energy Truce

Political analyst and serviceman Oleksandr Musiienko explained why Putin may have agreed to suspend strikes on Ukraine’s energy sector and clarified how oil factors into this, Politeka reports.

He spoke about this on his blog.

In passing, the expert cites a major Financial Times article stating that Russia continues to lose revenue from oil sales. Prices, he emphasizes, have already fallen to a record low of $39 per barrel for Russian oil, according to a former top manager of Lukoil who spoke with Financial Times journalists.

“This top manager says that if things continue this way—if Russian ‘shadow fleet’ vessels keep being delayed and seized, if Ukraine continues strikes on refineries and oil transport logistics, and if U.S. and European sanctions against Russia’s oil industry are expanded and tightened—then the oil market will start operating at a loss. Right now it barely covers production costs and no longer generates profit, but with additional pressure it will go into the red,” Oleksandr Musiienko explains.

That is why, the expert notes, Russians may set a condition: do not detain the shadow fleet, let it continue sailing the seas, and in return they are ready to suspend strikes on Ukraine’s energy sector. This, he is convinced, is roughly how it could look, because otherwise losses from oil would be colossal. This is one of the reasons why Putin may agree to an energy truce.
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