Oil Prices Begin the Week With a Gain on Russian Infrastructure Attacks

Crude oil prices began the week with a rise, building on gains made last week, as Ukrainian drone attacks on Russian energy infrastructure continued, notably on a major oil export terminal in Primorsk, Russia’s second-largest Baltic port and largest oil export hub on the Baltic.

At the time of writing, Brent crude was trading at $67.29 per barrel, with West Texas Intermediate at $63.06 per barrel, both up from opening.

The Ukrainian forces attacked Primorsk with drones last week, causing damage to the Primorsk port and disrupting shipments at the terminal, which has the capacity to handle 1 million barrels of crude daily. Prices immediately went up and stayed up.

“The attack suggests a growing willingness to disrupt international oil markets, which has the potential to add upside pressure on oil prices,” JP Morgan’s commodity analysis team said in a note, as quoted by Reuters earlier today.

Another Ukrainian drone attack meanwhile targeted one of the biggest refineries in Russia, Kirishinefteorgsintez, and while the damage appears to be minor, the fact of the attack would likely fuel further oil price movement higher due to the facility’s size. Kirishinefteorgsintez can process up to 355,000 barrels of crude daily.

President Trump has added to upward pressure on prices by intensifying his calls to the European Union to stop importing Russian oil.

“Europe is buying oil from Russia. I don’t want them to buy oil,” Trump told the media on Sunday, as quoted by Reuters. “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.”

Trump is following the line of pressuring Russia to agree to a peace with Ukraine by hurting its energy export revenues, including through secondary sanctions for buyers of these energy exports.

By Irina Slav for Oilprice.com

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