Oil prices have risen after Ukraine stepped up attacks on Russian energy infrastructure, stoking concerns about a potential reduction in Russian crude supplies.

Source: Reuters

Details: It is reported that Brent futures added 3 cents, or 0.04%, to US$67.76 per barrel. US WTI futures gained 7 cents, or 0.11%, to US$63.73.

On Sunday 24 August, Ukraine carried out a drone attack on Russia, which, according to Russian officials, sharply reduced output at a reactor at one of the country’s largest nuclear power plants and sparked a major fire at the Ust-Luga export fuel terminal.

Meanwhile, a fire at the Novoshakhtinsk refinery in Rostov Oblast had been burning for a fourth day, the acting regional governor said, blaming a Ukrainian drone attack. The plant mainly produces fuel for export and has an annual capacity of 5 million tonnes of crude, or about 100,000 barrels per 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 analyst Tony Sycamore.

At the same time, US Vice President JD Vance said Russia had made "significant concessions" on the path to a negotiated settlement of the war against Ukraine.

"They recognised 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," Vance told NBC.

However, US President Donald Trump on Friday again threatened sanctions against Russia if there is no progress towards a peace settlement within two weeks.

Investor risk appetite improved after Federal Reserve Chair Jerome Powell on 22 August hinted at a possible rate cut at the central bank’s next meeting.

"A risk-on tone across markets boosted investor appetite across the commodities complex, aided by renewed supply side issues across energy and metal," ANZ analysts noted.

Background: Ukrainian drone attacks, which resumed in August, have hit at least seven major Russian refineries and could inflict irreparable damage on the country’s refining sector.

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