Oil prices have climbed further as investors assess the effects of Ukrainian drone strikes on Russian refineries which may disrupt the country’s oil and fuel exports, while also tracking rising fuel demand in the United States.

Oil prices have climbed further as investors assess the effects of Ukrainian drone strikes on Russian refineries which may disrupt the country’s oil and fuel exports, while also tracking rising fuel demand in the United States.

Source: Reuters

Details: Brent crude futures climbed 36 cents, or 0.5%, to US$67.35 a barrel by 06:32 GMT, while US WTI gained 36 cents, up 0.6%, reaching US$63.05.

Last week, both contracts rose by more than 1% as Ukraine intensified its attacks on Russian oil infrastructure, including the largest export terminal in Primorsk and the Kirishi refinery, one of the two largest in Russia.

“The attack suggests a growing willingness to disrupt international oil markets, which has the potential to add upside pressure on oil prices,” JPMorgan analysts led by Natasha Kaneva said in a note, referring to the attack on Primorsk.

Primorsk is capable of shipping about 1 million barrels of oil per day, making it a key export hub in western Russia.

The Kirish refinery, run by Surgutneftegaz, processes around 17.7 million tonnes of oil annually (355,000 barrels per day), accounting for 6.4% of Russia’s total output.

“If we are seeing a strategic shift by Ukraine towards Russian oil exporting infrastructure - that brings upside risks to forecasts,” IG markets analyst Tony Sycamore said, despite ongoing concerns around oversupply as OPEC+ plans to ramp up output.

An oil company in Russia’s Bashkortostan region will maintain production levels despite Saturday’s drone attack, regional head Radiy Khabirov said.

Pressure on Russia is mounting, as US President Donald Trump on Sunday reiterated his willingness to impose sanctions against Russia but called on Europe to act in concert with Washington.

Investors are also watching US-China talks in Madrid which began on Sunday, amid Washington’s demands that allies impose tariffs on Chinese imports due to its purchases of Russian oil.

Last week, weak job creation and inflation data in the US heightened concerns about economic growth in the world’s largest oil consumer, even despite expectations of a rate cut by the Federal Reserve at a meeting on 16-17 September.

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