Ukrainian Drone Strike on Russian Oil Port Drives Up Global Crude Prices
A drone strike conducted by Ukraine on the Russian port of Novorossiysk has resulted in a rise of over 2% in oil prices during trading on Friday. This surge is attributed to damage sustained by critical oil infrastructure in the Black Sea region.
Brent crude futures climbed to $64.35 per barrel, an increase of $1.34, while West Texas Intermediate rose to $60.09 per barrel, up $1.40.
The Krasnodar operational command confirmed via the Telegram app that "drone fragments impacted residential buildings and an oil depot within a transshipment complex, along with additional coastal facilities."
This incident occurs amid volatile conditions in the oil market, which had stabilized on Thursday after experiencing a decline of more than two dollars per barrel in the previous session. Easing concerns regarding Western sanctions on Russian oil have contributed to worries about global supply levels.
In related developments, the United States has imposed sanctions on Russian oil companies Lukoil and Rosneft in an effort to compel the Kremlin to engage in peace negotiations concerning Ukraine. These sanctions will prohibit transactions with the two companies after November 21.
J.P. Morgan reported that approximately 1.4 million barrels per day of Russian oil—nearly one-third of maritime export capacity—are currently stranded in tankers as unloading operations slow due to U.S. sanctions on Rosneft and Lukoil. The bank noted that unloading shipments will become increasingly challenging after November 21.
Several additional factors are influencing the market, as OPEC indicated that global oil supplies are projected to slightly exceed demand by 2026. Meanwhile, data from the U.S. Energy Information Administration revealed that crude oil inventories have risen more than anticipated, reaching 427.6 million barrels.
