Ukrainian Drone Strike on Russian Oil Facilities Drives Global Oil Prices Higher

A Ukrainian drone strike targeting the port of Novorossiysk in Russia has resulted in a rise of over 2% in global oil prices during trading on Friday. This increase is a direct response to damage inflicted on key oil facilities in the Black Sea.

Brent crude futures reached $64.35 per barrel, up $1.34, while West Texas Intermediate climbed to $60.09 per barrel, marking a $1.40 increase.

The Krasnodar regional command confirmed via the Telegram app that "drone debris struck residential apartments and an oil depot in a transshipment complex, along with other coastal facilities."

This incident comes amid significant fluctuations in the oil market, following a stabilization on Thursday after prices had dropped by more than $2 per barrel in the previous session. Concerns over Western sanctions on Russian oil have eased worries about global supply abundance.

In this context, the United States has imposed sanctions on the Russian oil companies Lukoil and Rosneft, aiming to pressure the Kremlin into peace negotiations regarding Ukraine. These sanctions prohibit transactions with these companies after November 21.

JP Morgan reported that "nearly 1.4 million barrels per day of Russian oil - about one-third of maritime export capacity - are now stuck on tankers due to slowed unloading operations resulting from U.S. sanctions on Rosneft and Lukoil," noting that "unloading shipments will become more challenging after November 21."

Several additional factors are shaping the market landscape, as OPEC announced that global oil supplies will slightly exceed demand by 2026, while data from the U.S. Energy Information Administration indicated a larger-than-expected increase in crude oil inventories, reaching 427.6 million barrels.