Oil prices climbed further on Monday as markets reacted to Ukrainian drone strikes targeting Russian refinery infrastructure, raising concerns over potential disruptions to Russia’s crude and fuel exports. Investors also monitored signs of increasing fuel demand in the United States.
Brent crude futures gained 36 cents, or 0.5%, reaching $67.35 per barrel by 0632GMT, while U.S. West Texas Intermediate(WTI) crude rose 36 cents, or 0.6% to $63.05 per barrel. Both benchmarks saw over 1% gains last week fueled by intensified Ukrainian strikes against key Russian oil facilities, including the Primorsk export terminal and the Kirishi refinery—two vital components of Russia’s oil export network.
JPMorgan analysts, led by Natasha Kaneva, noted that the attack indicated Kyiv’s growing intent to disrupt global oil markets, which could exert further upward pressure on prices. Primorsk, which handles roughly 1 million barrels per day (bpd), is the largest crude loading port in western Russia. Meanwhile, the Kirishi refinery, run by Surgutneftegaz, processes about 355,000 bpd, accounting for approximately 6.4% of Russia’s total crude output.
IG Markets analyst Tony Sycamore acknowledged the evolving tactics by Ukraine in targeting Russia’s export capabilities, warning of increased risks to oil supply forecasts. This comes amid continuing concerns about possible oversupply, as OPEC+ plans to boost production.
Despite a recent drone strike on a facility in Russia’s Bashkortostan region, local authorities, including regional governor Radiy Khabirov, confirmed that production will continue uninterrupted.
Adding to geopolitical tensions, U.S. President Donald Trump reiterated on Sunday his willingness to impose sanctions on Russia. However, he stressed that Europe must align its actions with those of the United States.
Investors also kept an eye on the U.S.-China trade negotiations in Madrid, launched on Sunday. The talks come as Washington presses its allies to impose tariffs on Chinese imports linked to Beijing’s purchases of Russian oil.
Concerns about U.S. economic growth surfaced last week after weaker job creation data coupled with rising inflation. These factors have increased uncertainty about demand in the world’s largest oil consumer, even as markets anticipate a potential Federal Reserve rate cut at the upcoming September 16-17 policy meeting.
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