Ukrainian Drone Strike on Russian Oil Facilities Drives Global Oil Prices Up
A Ukrainian drone strike on the Russian port of Novorossiysk resulted in a more than 2% increase in oil prices on Friday. This surge was a direct response to damage inflicted on significant oil facilities in the Black Sea area.
Brent crude futures rose to $64.35 per barrel, marking an increase of $1.34, while West Texas Intermediate climbed to $60.09 per barrel, up by $1.40.
The operational management in the Krasnodar region confirmed via the Telegram app that "drone fragments struck residential buildings and an oil storage facility at a transshipment terminal, along with other coastal infrastructure."
This incident comes at a time when the oil market is experiencing significant volatility, following a stabilization of prices after a decline of over two dollars per barrel in the previous session. Concerns regarding Western sanctions on Russian oil have somewhat alleviated fears of a global oversupply.
In this context, the United States has imposed sanctions on two Russian oil companies, Lukoil and Rosneft, to pressure the Kremlin into resuming peace talks regarding Ukraine. The sanctions prohibit transactions with these companies after November 21.
JPMorgan reported that approximately 1.4 million barrels per day of Russian oil—nearly a third of maritime transport capacity—are stranded on tankers due to slower unloading processes resulting from U.S. sanctions against Rosneft and Lukoil, noting that unloading shipments after November 21 will become more challenging.
Several other factors are shaping the market, as OPEC indicated that global oil supply will slightly exceed demand by 2026, while data from the U.S. Energy Information Administration revealed an unexpected increase in crude oil inventories, reaching 427.6 million barrels.
