Oil prices rose on Friday after Ukraine launched drone attacks on Russia’s energy infrastructure, disrupting fuel exports and tightening global supply.
Brent crude futures climbed 51 cents, or 0.73%, to $69.93 a barrel by 12:46 p.m. CDT (1746 GMT). U.S. West Texas Intermediate (WTI) crude gained 71 cents, or 1.09%, reaching $65.69 a barrel. Both benchmarks are on track for their largest weekly increase since mid-June.
“Markets remain focused on the conflict between Russia and Ukraine,” said John Kilduff, partner at Again Capital. “These drone attacks by Ukraine are beginning to add up.”
Russia recently announced a partial ban on diesel exports until the end of the year, alongside an extension of its gasoline export ban, according to Deputy Prime Minister Alexander Novak. Refining disruptions have already caused shortages of certain fuel grades across several Russian regions.
Andrew Lipow, president of Lipow Oil Associates, noted that U.S. government action is also supporting prices. “President Trump continues to pressure allies to cut Russian imports,” he said, adding that countries such as India and Turkey may scale back purchases.
Tensions have escalated further after NATO warned it could respond to violations of member states’ airspace. Analysts say this increases the risk of new sanctions targeting Russia’s oil industry.
Meanwhile, Iraq’s semi-autonomous Kurdistan region plans to resume crude exports on Saturday through Turkey’s Ceyhan port, according to state marketer SOMO. “The market will be watching Kurdish production to see how much supply comes back,” Lipow added.
On the demand side, U.S. economic growth surprised to the upside, with GDP rising at a revised 3.8% annualized rate last quarter, according to the Commerce Department. Kilduff said any disruption to Russian supplies for China and India could boost demand elsewhere. “With the Fed cutting interest rates, that should also support demand,” he noted.
However, analysts caution that stronger-than-expected economic data may make the Federal Reserve more cautious about further rate cuts, after its recent 25 basis point reduction — the first since December.
