Ukraine's drone strikes hit Russia's oil industry

**Bissi Adebayo** (0:01)
Is Ukraine hit in Russia where it hurts the most? It's World Business Express from the BBC World Service, I am Bissi Adebayo. Also, oil prices rise after fresh US strikes on Iran, and the eSports World Cup gets underway in France.
So, fighting has resumed in the Persian Gulf with both the US and Iran firing at numerous targets on land and at sea. So, has the ceasefire collapsed? Well, President Trump certainly seems to think so.

**SPEAKER_3** (0:37)
As far as I'm concerned, it's over.

**George Godberg** (0:39)
I'll speak to our negotiators.

**SPEAKER_3** (0:41)
They want to negotiate. They're good people. Steve Witkoff, Jared Kushner, but they have to come back to me.

**Bissi Adebayo** (0:48)
Well, the president's comments led to oil prices shutting up by around 5% on Wednesday, and the head of the International Maritime Organization wants shipping companies to avoid the Strait of Hormuz to keep seafarers in the region safe. Well, let's speak to George Gutberg, who's a fund manager at Polar Capital. So, George, how much of today's jump in oil prices is down to fears that this conflict could escalate again?

**George Godberg** (1:14)
Well, if we put the move in context, we've seen a price of a barrel of Brent has gone from nearly $120 at the end of April, it came all the way back to almost $70. So as I sit here right now, just touching just a little under $80. So it's had quite a big move up from that $70 level, but thankfully still well below the peaks we saw when the conflict was raging. So I think the market is pricing in some escalation, but not a full escalation.

**Bissi Adebayo** (1:37)
One other quick mention though, the Japanese car maker Toyota is moving production of one of its pickup truck factories from Mexico to Texas. So isn't that the kind of investment President Trump wanted his tariffs to bring?

**George Godberg** (1:53)
Sadly, I think it's exactly the sort of investment we want, shifting production onshore into the US is exactly what it's been after. Toyota has been struggling share price wise against sort of increased Chinese competition, especially over the last few years. So it's a way of them carrying favor in the US market, and it's clearly delivering what he wants.

**Bissi Adebayo** (2:13)
George Godber of Polar Capital, thank you.
Now war in the Persian Gulf has restricted oil exports from the Middle East, and another major oil exporter, Russia, is struggling to take advantage. And that's because Ukraine and drones have repeatedly damaged Russia's petrochemical plants in recent months, with three more facilities damaged on Wednesday. The BBC's James Lundell reports from Moscow.

**James Lundell** (2:40)
If you want to get a sense of the fuel crisis gripping Russia, take a drive around Moscow.
There are queues at most petrol stations, some short, some long, and if there are none, it means there's no petrol left. Little wonder some folk are feeling frustrated. Yekaterina tells us she's not happy.

**SPEAKER_3** (3:00)
I think it's a point of panic, because everybody thinks that there will be no oil.

**James Lundell** (3:11)
Villeri says he thinks it's a bit strange having to queue for fuel in a country that extracts so much oil. Andrei accepts things could get worse, but he's not afraid. We survived through the 90s, he tells us. We remember times which were more difficult. It doesn't scare us. But Elmar tells us there's no fuel, prices are rising and he's rethinking a road trip to Dagestan. And what's to blame?
In our country, you cannot say what's to blame, he tells me.
Well what's immediately to blame are the rising number of Ukrainian drone and missile attacks on Russia's oil refineries, strikes deep within Russian territory. And less fuel means more queues. For years, Vladimir Putin has tried to insulate people from the impact of his war on Ukraine. Well, these queues are making that much harder. For these drivers, the war is not just coming closer to home, it's having a material impact on their daily lives. And that's true for Russians across this vast country. Social media is awash with images of queuing drivers, not all of whom remain patient. Call the police, she cries, as a fight ensues. Images of angry drivers go viral, as do aerial shots of snaking queues kilometers long, such as in Chita, in Russia's Far East.
Here's a queue, says the man, and it's now gone into its second day. It's just crazy. So how worried is the Kremlin? Well, President Putin is concerned enough to address the issue publicly on state TV.

**SPEAKER_6** (5:05)
These attacks on our infrastructure facilities are obviously creating problems. We are currently seeing a certain shortage, but it's not critical.