Crude oil prices began the week higher as Ukrainian drone attacks on major Russian energy infrastructure threatened to disrupt supply.
Oil prices climbed higher on Monday after Ukrainian drone attacks targeted Russian oil infrastructure, including major export terminals and refineries. The strikes have led to increased concerns about supply disruptions, driving further price gains after a strong performance last week.
Brent crude futures rose 0.7% to reach $67.46 a barrel, before dropping to $67.13 later on. US West Texas Intermediate (WTI) crude hit $63.17 a barrel, up around 0.8%, settling back at $62.88 by mid-morning UK time.
Investors were closely monitoring the oil markets amid this latest escalation in the ongoing conflict between the two countries. Last week, both benchmarks gained over 1% last week as Kyiv intensified its campaign against Russia’s energy infrastructure.
Ukrainian forces struck a range of major Russian facilities including Primorsk, the largest oil export hub on the Baltic with a daily capacity of one million barrels. The Kirishi terminal in Leningrad Oblast, one of Russian most prominent refineries, was also targeted.
Following the attacks, key oil shipments faced significant disruption, with both facilities being crucial to Russia’s global oil trade. While adding to market uncertainty, the strikes signal Ukraine’s growing focus on disrupting Russia’s ability to export oil and finance its war.
Why is Ukraine targeting Russian oil refineries?
Ukraine’s President Volodymyr Zelensky said the attacks on oil facilities represent the “most effective sanctions” on Moscow. He argued that strikes on oil infrastructure are a way of weakening its war machine by limiting Russia’s financial strength.
In a video address on Sunday evening, Zelensky emphasised the importance of drones in defending his country against the Russian invasion. He also went on to offer NATO sufficient support in helping to counter Russian drones going forward.
“We are ready to train all partners in this defence,” he said. “Everyone sees that the Russians are looking for ways to expand the war into the territory of Poland and the Baltic States, and the Russian army is also testing Romania.”
While NATO already has effective defensive weapons, he said that Ukraine has developed “significantly more cost-effective, massive and systematic solutions.”
US wants further sanctions on Russian oil buyers
US President Donald Trump added to upward pressure on prices by calling on NATO countries to end Russian oil imports. Addressing the media on Sunday, he said, “Europe is buying oil from Russia. I don’t want them to buy oil.
“And the sanctions… that they’re putting on are not tough enough, and I’m willing to do sanctions, but they’re going to have to toughen up their sanctions commensurate with what I’m doing.”
India temporarily halted imports after Trump imposed tariffs, including a 25% duty in August followed by increases later that month. US officials also warned China of possible penalties if it continues purchasing Russian oil despite sanctions.
Meanwhile, Washington’s allies met Chinese officials in Madrid for trade talks, with energy trade among the main issues being discussed. The talks come as the US pushes allies to support its stance on tariffs and Russian oil.
OPEC+ continues to raise supply gradually, but increased US production and slowing global economies continue to weigh on longer-term demand forecasts. Prices remain capped by concerns that oversupply could balance out the risks created by ongoing conflict.
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