Crude oil futures experienced a significant surge on Monday as Ukrainian drone strikes disrupted Russian refining capacity and Moscow ordered output cuts to meet OPEC+ targets. The West Texas Intermediate contract for May increased by $1.32, or 1.64%, settling at $81.95 a barrel. Similarly, the Brent contract for May rose by $1.32, or 1.55%, settling at $86.57 a barrel.

According to industry sources cited by Reuters, Russia has instructed companies to reduce oil output in order to meet its commitments to the OPEC+ alliance. Several OPEC+ countries have agreed to voluntary production cuts totaling 2.2 million barrels per day throughout the second quarter.

One of the major consequences of the ongoing conflict between Ukraine and Russia is a series of drone attacks on Russian energy infrastructure. A Ukrainian drone strike at the Kuibyshev oil refinery in the city of Samara caused a fire over the weekend. Reuters' sources revealed that the assault knocked out a significant refining unit at the facility.

British intelligence reports estimate that at least 10% of Russia's refining capacity has been disrupted as a result of these attacks. The British Ministry of Defense highlighted that depending on the extent of the damage, major repairs could be both time-consuming and expensive.

The Ukrainian government has been actively targeting Russian energy infrastructure since the beginning of this year. Ukrainian intelligence claimed that a dozen facilities have been successfully hit in these strikes. These attacks have had a substantial impact on Russia's refining capacity, posing additional challenges for the country's energy sector.

The increase in crude oil prices can be attributed to the combination of disrupted Russian refining capacity and Moscow's decision to cut output. As tensions between Ukraine and Russia continue, the situation remains volatile, and its long-term impact on oil prices and global energy markets remains uncertain.

As the situation unfolds, it will be crucial to closely monitor developments in the conflict between Ukraine and Russia and their potential ramifications for the energy sector.