Oil holds steady as Ukraine drone strikes, Red Sea crisis cause disruptions

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The Charles Eddie, a crude oil tanker owned by Euronav SA, a Belgian shipping company, sails northbound on the Suez Canal in Ismailia, Egypt.
Dana Smillie | Bloomberg | Getty Images

Crude oil futures held steady on Tuesday as the wars in Eastern Europe and the Middle East disrupt supplies.

The West Texas Intermediate contract for May rose 19 cents, or 0.23%, to $82.14 a barrel. The Brent contract for May added 10 cents, or 0.12%, to $86.85 a barrel.

Ukraine has escalated its drone strikes against Russian oil refineries, knocking an estimated 900,000 barrels per day of capacity offline, according to Goldman Sachs. The outages could take weeks to repair and in some cases there may be a permanent loss of capacity, the investment bank said.

The disruptions’ impact on crude prices will likely be mixed, with a decline in refinery demand bearish while a potential reduction in Russian oil exports bullish, Goldman noted.

The Red Sea crisis, meanwhile, has led to a build of 100 million barrels of oil on international waters as shipping companies redirect trade flows to avoid attacks by Houthi militants, according to the bank.

The Red Sea disruptions combined with Russian shipping frictions has given crude prices up to a $4 boost per barrel due to larger than expected draws from commercial stocks, according to Goldman.

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