Ukrainian Drone Strike on Russian Oil Facilities Drives Global Crude Prices Higher
A Ukrainian drone strike on oil facilities in Novorossiysk, Russia, has led to a more than 2% increase in global oil prices during trading on Friday. This rise follows damage to critical oil infrastructure in the Black Sea region.
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 Krasnodar operational command confirmed via Telegram that "drone fragments struck residential apartments and an oil storage facility within a resupply complex, along with other coastal installations."
This incident comes at a time when the oil market is experiencing significant fluctuations, following a stabilization on Thursday after a drop of over $2 per barrel in the previous session. Concerns regarding Western sanctions on Russian oil have alleviated fears of a global oversupply.
In this context, the United States has imposed sanctions on Russian oil companies Lukoil and Rosneft as part of efforts to pressure the Kremlin into peace negotiations regarding Ukraine. These sanctions prohibit transactions with both companies after November 21.
JP Morgan has indicated that approximately 1.4 million barrels per day of Russian oil, nearly one-third of maritime export capacity, are currently stranded on ships due to slowed unloading operations caused by U.S. sanctions on Rosneft and Lukoil, suggesting that unloading shipments will become increasingly difficult after November 21.
Several other factors have also influenced the market, as OPEC announced that global oil supplies will slightly exceed demand by 2026, while data from the U.S. Energy Information Administration revealed a rise in crude oil reserves that surpassed expectations, reaching 427.6 million barrels.
