Oil prices edged higher on Tuesday amid mounting fears of supply disruptions following intensified hostilities between Russia and Ukraine.
Brent crude was trading at $68.55 per barrel, gaining 40 cents or 0.59 per cent around 7:20 AM. Meanwhile, US West Texas Intermediate (WTI) crude rose more sharply, advancing $1.05 or 1.64 per cent to $65.06 per barrel. Trading in WTI was muted on Monday due to the U.. Labour Day holiday, reported Reuters.
Drone Strikes Hit Russian Refineries
Supply concerns have deepened after a series of Ukrainian drone attacks knocked out facilities responsible for around 17 per cent of Russia’s refining capacity. This equates to some 1.1 million barrels per day being affected, according to calculations by Reuters.
Ukrainian President Volodymyr Zelenskiy signalled that Kyiv intends to carry out further strikes deep into Russian territory. The announcement came after weeks of sustained operations targeting Russia’s vital energy infrastructure.
Both sides have escalated aerial assaults in recent weeks. While Moscow has focused on crippling Ukraine’s energy and transport systems, Kyiv has taken aim at Russian oil refineries and key pipelines in a bid to curtail revenue streams.
Daniel Hynes, senior commodity strategist at ANZ, commented: ‘Ongoing risks to energy infrastructure in Russia remain high. Ukraine struck more Russian oil refineries over the weekend as it ramped up its attacks on infrastructure.’
Geopolitical Risks Add to Market Jitters
Beyond the battlefield, geopolitical developments are amplifying the uncertainty. At a summit on Monday, Chinese President Xi Jinping emphasised his call for a “new global order” that prioritises the Global South. The remarks, delivered at a gathering attended by Russian and Indian leaders, are viewed as a direct counterweight to US influence.
China and India remain the largest importers of Russian crude, a crucial lifeline for Moscow’s economy. Despite US President Donald Trump raising tariffs on Indian imports in retaliation for its continued purchases of Russian oil, Beijing has so far avoided similar punitive measures.
Markets Eye OPEC+ Meeting
Attention now shifts to the upcoming meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, scheduled for September 7. Investors are keen to gauge whether the group will signal any fresh increases in production, a move that could potentially offset some of the supply concerns.
With the Russia-Ukraine conflict showing no sign of easing and broader geopolitical tensions heightening, energy markets are braced for continued volatility in the days ahead.