Connect with us

Published

on

Smoke billows after Ukraine’s SBU drone strikes a refinery, amid Russia’s attack on Ukraine, in Ryazan, Ryazan Region, Russia, in this screen grab from a video obtained by Reuters, March 13, 2024. 

Video Obtained By Reuters | Via Reuters

Ukraine’s campaign of attacks against Russian oil refineries is demonstrating how relatively cheap drones that utilize artificial intelligence could pose a major threat to global energy markets.

Ukraine-launched drones have hit 18 Russian oil refineries this year with a combined capacity of 3.9 million barrels per day, according to report published by JPMorgan earlier this month. Some 670,000 bpd of Russian refining capacity is currently offline due to the strikes, according to the bank.

Ukraine’s capabilities are growing with its drones now demonstrating a substantially longer range. Earlier this month, Kyiv hit Russia’s third-largest oil refinery, Taneco, which is located up to 1,300 kilometers — roughly 800 miles — from the frontlines, according to JPMorgan.

Ukraine is increasingly using drones that are enabled with AI, which helps the weapons navigate and avoid jamming, according to the bank.

“The AI guidance also delivers strike precision, maximizing the impact of the strikes by targeting specific areas like distillation towers, repairs of which requires Western technology,” Natasha Kaneva, head of global commodities strategy at JPMorgan, told clients in the April report. “This makes the repairs costly and often require equipment that the country is not able to produce.”

U.S. Defense Secretary Lloyd Austin made clear Tuesday that the Biden administration is worried about the strikes in a rare airing of public disagreement with U.S. allies in Kyiv.

“Certainly, those attacks could have a knock-on effect in terms of the global energy situation,” Austin told the Senate Armed Services Committee. “Quite frankly, I think Ukraine is better served in going after tactical and operational targets that can directly influence the current fight.”

The U.S. has urged Ukraine to stop the attacks on Russian energy infrastructure out of concern that they could drive up crude oil prices and instigate retaliation from Moscow, three people familiar with the discussions told the Financial Times last month.

The losses to Russian refining capacity could worsen as Ukraine aims to build a full-fledge drone industry and produce a million units domestically this year, according to the JPMorgan report. If Kyiv is able to extend the drones’ range to 1,500 kilometers (about 932 miles), they could potentially hit 21 refineries with more than 4.4 million bpd of refined capacity, according to the report.

“There’s room for this to become a bigger problem, because we’ve come to count on Russian supply getting to the global market, which allows other non-Russian supply to go to other places,” said John Kilduff, an energy expert and founding partner at Again Capital.

The deployment of AI drones also has broader implications for global energy markets, according to Bob Brackett, a senior research analyst at Bernstein. The drones are cheap to produce compared to the millions of dollars in damage they can cause and could empower nonstate actors to challenge superior fighting forces, Brackett told clients in Friday note.

“These drones can easily and asymmetrically disrupt global seaborne trade,” Brackett wrote, warning that oil exporters such as Russia aren’t the only countries that need to be worried. Oil importers, like China and India, will now have to worry about disruptions to crude flows from drone attacks, he said.

Impact on oil, gasoline prices

Ukraine’s campaign of drone strikes comes at the same time as tensions are running red hot in the Middle East, with OPEC member Iran and Israel now teetering on the brink of a direct confrontation.

U.S. crude oil has rallied nearly 20% this year, while the global benchmark Brent has gained 17% as the wars in Middle East and Eastern Europe rage against the backdrop of rising crude demand and tightening supply. Gasoline futures have surged about 33% since the year began.

Bob McNally, president of Rapidan Energy, said the drone strikes are not a major issue for oil prices right now because the attacks on refineries are primarily affecting Russia’s production of diesel at a time when the market is already glutted.

But Russia is also major exporter of a gasoline feedstock called naphtha. If naphta markets were to tighten because of the attacks it could have an impact on gas prices and balances, said McNally, who served as a senior energy official in the George W. Bush administration.

Goldman Sachs said in a research note last month that the strikes are bullish for diesel prices, but the impact on crude oil is mixed. Outages can lead to reduced oil demand from refineries, which is bearish for prices. But the market is worried Ukraine could increasingly hit oil production and transportation infrastructure, which would weigh on Russian crude exports, according to Goldman.

Bart Melek, head of commodity strategy at TD Securities, said the current strikes could have an indirect effect on oil markets. As Russian fuel exports decline due to the attacks, countries that rely on those exports then need to source fuel from refineries in other jurisdictions, Melek said. Those refiners need more crude to meet the demand which can stress oil supplies, he said.

Russian production already poses a problem for the Biden administration. Moscow has pledged to cut its oil output and exports by an additional 471,000 barrels per day in the second quarter to meet its commitments to OPEC+.

Those cuts could push the price of Brent crude to $100 by September, which will put pressure on the Biden administration just before the presidential election, according to a JPMorgan report last month.

The investment bank expects U.S. gas prices to hit $4 per gallon by May, the highest level since the summer of 2022.

“There are few issues that terrify a sitting American president in an election year more than surging gasoline prices,” said Rapidan’s McNally.

Don’t miss these exclusives from CNBC PRO

Continue Reading

Environment

Tesla will pause part of new Model Y production for 3 weeks for upgrades, report says

Published

on

By

Tesla will pause part of new Model Y production for 3 weeks for upgrades, report says

A new report states that Tesla will pause part of new Model Y production at Gigafactory Shanghai for 3 weeks to upgrade the lines.

The shutdown will extend beyond the regular Chinese New Year.

The Chinese New Year is technically 2 weeks long, but the official holiday lasts a week, during which significant parts of the country’s industries shut down.

That includes the auto industry and Tesla, but it looks like the American automaker plans to do things a bit differently this year after having just started production of its updated Model Y at Gigafactory Shanghai.

According to a new report from Bloomberg, Tesla plans to shut down part of its new Model Y production lines from around January 22 to February 14.

In comparison, Tesla only plans to shut down production of the Model 3, the only other vehicle produced at the plant, from January 26 to February 3.

Tesla only recently started production of the updated version of its best-selling electric SUV. The report states that the automaker will take advantage of this extended Lunar New Year shutdown to upgrade parts of the production lines in order to streamline and ramp up production capacity.

The automaker delivered about 480,000 Model Ys in China in 2024 – up about 5% year-over-year.

Reports claimed that Tesla received over 50,000 orders for the updated vehicle version in the first 24 hours of the unveiling.

Electrek’s Take

It makes sense. Over the last few weeks, Tesla has basically been running a pilot of production of the upgraded version, which is entirely different from the previous version, but there are enough differences that new parts and processes can create bottlenecks.

Tesla likely found ways to optimize production during that time and now will implement it during this extended shutdown.

We will try to keep track of the Model Y production and rollout in China as any delay or production issues can be extremely impactful, considering the Model Y is the world’s best-selling EV and China is the biggest EV market.

Any kind of issue there can be extremely impactful on Tesla and the broader EV market.

FTC: We use income earning auto affiliate links. More.

Continue Reading

Environment

Honda is bringing back the Acura RSX in 2025 as an EV built in the US

Published

on

By

Honda is bringing back the Acura RSX in 2025 as an EV built in the US

American Honda shared a business outlook for 2025 during a recent briefing with the media. In terms of electrification, the next 12 months for Honda will be much of the same: facelifting tried-and-true ICE models like the CR-V and Passport. However, there was one exciting piece of news from Honda on the BEV front—the automaker has confirmed it will begin US production of an Acura RSX EV.

Honda and its premium sub-brand Acura, for that matter, are getting more and more coverage on Electrek’s homepage thanks to the combined efforts in adding new BEV models… although that transition has still been relatively slow compared to other OEMs.

Nevertheless, Honda launched the all-electric Prologue, which has found quick success with US consumers. Shortly thereafter, Acura launched the ZDX, which sits atop the same Ultium platform as Prologue, provided through a partnership with GM.

Honda has since backed out of that partnership—at least the part where GM provides vehicle architecture—and has been developing its own in-house platform that will one day power its new 0 Series lineup of BEVs. These originally debuted at CES 2024 and remerged at this year’s event as prototypes—and now they’re white! They will also feature a new proprietary vehicle OS called ASIMO (more on that below).

While we await the arrival of those Honda BEVs, we can expect to see a new Acura model hit the market first, based on an SUV called the Performance EV Concept, which debuted at Monterey Car Week this past August. At the time, the Acura Design Studio described the concept as “the evolution of Acura’s performance-focused design direction and the brand’s next all-electric model.”

That new production model didn’t have a name yet, but we did learn it would be the first BEV to debut on Honda’s new bespoke platform and the first all-electric model to roll off its assembly lines at the new Honda EV Hub in Marysville, Ohio.

Today, we learned that the Performance EV Concept has evolved into a full-fledged passenger model with a familiar name – the Acura RSX EV.

Acura's-sales-tool-EV
Acura’s Performance EV Concept / Source: Honda
Acura RSX EV
A camouflaged look at the Acura RSX EV prototype / Source: American Honda

Acura brings back the “RSX” nameplate as an EV SUV

During a media briefing earlier this week, American Honda shared its 2025 outlook, led by vice president of sales, Lance Woelfer. This year’s strategy includes the production of its first original BEV in Ohio using domestically and globally sourced parts as a new hybrid model and several ICE vehicles (boo).

Woelfer confirmed that the first bespoke all-electric model coming out of Ohio will be the Acura RSX EV. This move marks the return of a notable nameplate in the Acura lineup that evolved from the original Honda Integra. The Acura RSX was sold in North America from the early- to mid-2000s and still has a decent fanbase, especially amongst fans of the Honda Integra and Japanese Domestic Market (JDM) enthusiasts.

Acura revived the Integra nameplate in 2021 as a Honda Civic-based liftback, and although that model is sharp, it remains combustion, hence why Acura has revived the RSX name as an EV model. Per Mike Langel, assistant vice president, Acura National Sales.

The nameplate pays homage to the Acura RSX with its coupe-like silhouette, but it truly represents a forward-looking approach to fun-to-drive performance. Our second all-electric SUV will solidify our EV credentials even as its ICE stablemates, the all-new ADX, RDX, MDX, TLX and Integra continue to attract new buyers to the Acura brand.

The Acura RSX EV, seen in a unique camo wrap above, looks quite sleek, but I predict Integra and RSX purists may reject this new model out of the gate because it’s undeniably an SUV, not a sporty compact like the vehicle(s) it’s named after. This reminds me of when Ford introduced the Mustang Mach-E, and brand loyalists argued, “That’s not a Mustang.” Just like the Mach-E, the Acura RSX EV represents a new generation of performance models, no matter what you call it.

The new SUV also represents a massive step for Honda and its premium brand, as the Acura RSX EV will be the first model to utilize Honda’s new EV platform and its new ASIMO OS operating system introduced at CES 2025. At the time, Honda said ASIMO will constantly update its in-vehicle software via over-the-air (OTA) updates for both the digital UX and integrated dynamics controls that will allow the automaker to deliver “a personalized ownership experience that will enhance the joy of driving.”

Acura says the RSX EV is slotted to begin development testing in real-world conditions this week ahead of planned production in Ohio later this year. We plan to visit Honda’s EV Hub later this month, so perhaps we can capture some images of where this new SUV will be built or, better yet, look at the prototype up close.

FTC: We use income earning auto affiliate links. More.

Continue Reading

Environment

Toyota funded climate deniers and Fred says Elon fudged the FSD numbers

Published

on

By

Toyota funded climate deniers and Fred says Elon fudged the FSD numbers

On today’s episode of Quick Charge, we look into a new study revealing that Toyota outspends all other automakers when it comes to funding climate change denying politicians and Fred accuses Elon of misrepresenting the data behind Full Self Driving (again).

We’ve also got word that the recently redesigned Tesla Model Y is being built in Giga Berlin, Hyundai’s electrified lineup is leading a record export year for the brand, and a new study says cleantech investments will beat out conventional energy production for the first time in 2025.

Prefer listening to your podcasts? Audio-only versions of Quick Charge are now available on Apple PodcastsSpotifyTuneIn, and our RSS feed for Overcast and other podcast players.

New episodes of Quick Charge are recorded, usually, Monday through Thursday (and sometimes Sunday). We’ll be posting bonus audio content from time to time as well, so be sure to follow and subscribe so you don’t miss a minute of Electrek’s high-voltage daily news!

Got news? Let us know!
Drop us a line at tips@electrek.co. You can also rate us on Apple Podcasts and Spotify, or recommend us in Overcast to help more people discover the show.

FTC: We use income earning auto affiliate links. More.

Continue Reading

Trending