Middle East and Russia Refinery Attacks Send Global Fuel Prices Soaring

European refiners are reaping bumper profits from producing fuels like gasoline and diesel due to a wave of attacks on oil refineries in the Middle East and Russia. These attacks have further tightened global supply, lifting fuel prices even as crude oil has fallen back to around $90 a barrel.

The premium that European low-sulphur gasoil futures command over the crude oil price has extended its all-time highs to $74.66 per barrel. This is despite the fact that crude oil prices have dropped below 2008's record of $147.

Saudi Arabia shut down its 400,000-barrel-per-day Jizan oil refinery on July 27 following an attack by Yemen's Houthis. Parts of Kuwait's 615,000 bpd Al-Zour refinery have also been affected due to a power cut. Ukraine's drone attacks have continued to hit Russian refining capacity, forcing the Kremlin to impose gasoline and diesel export bans.

As a result, fuel prices are rising globally, affecting consumers and businesses. The market is signaling that refining capacity is now as significant a problem as crude oil scarcity, if not greater.