Russian oil under threat: How drone strikes affect prices
Photo: Attack on Russian infrastructure has increased risks for the global oil market (Getty Images)
Oil prices on Monday showed slight gains following Ukrainian attacks on Russian infrastructure, raising concerns about possible disruptions in Russian oil supplies, Reuters reports.
Additional support for the market came from expectations of lower US interest rates, boosting prospects for global fuel demand.
Brent crude futures rose by 3 cents, or 0.04%, to $67.76 per barrel, while WTI futures increased by 7 cents, or 0.11%, to $63.73 per barrel.
On Sunday, Ukraine struck Russian targets with drones, reducing reactor output at one of the country’s largest nuclear power plants and causing a major fire at the fuel export terminal in Ust-Luga.
In addition, the Novoshakhtinsk refinery, with a capacity of about 100,000 barrels per day, has been affected by the attack for the fourth consecutive day.
“Given the success that Ukraine is having with its targeting of Russian oil infrastructure ... the risks for crude oil are shifting to the topside,” said IG market analyst Tony Sycamore.
Trump renews threats
Meanwhile, US Vice President JD Vance stated that Russia has made “significant concessions” regarding a settlement of the war in Ukraine.
“They've (Russians - ed.) recognized that they're not going to be able to install a puppet regime in Kyiv. That was, of course, a major demand at the beginning. And, importantly, they've acknowledged that there is going to be some security guarantee for the territorial integrity of Ukraine,” Vance said on NBC.
At the same time, US President Donald Trump renewed threats to impose sanctions on Russia if there is no progress in peace talks within two weeks.
Investors' risk appetite has improved after Federal Reserve Chair Jerome Powell reported on a possible interest rate cut in the USA at the next meeting.
“A risk-on tone across markets boosted investor appetite across the commodities complex, aided by renewed supply-side issues across energy and metals,” ANZ analysts noted.
Drone strikes on Russia
On August 24, ten drones were recorded over the port of Ust-Luga.
Debris from the UAVs caused a fire. Later, sources confirmed that Ukrainian Special Operations Forces and the Security Service of Ukraine carried out the operation.
