Oil prices rose in early Asian trading on Tuesday amid growing concerns over supply disruptions as the conflict between Russia and Ukraine intensifies.
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Brent crude climbed 40 cents, or 0.59%, to $68.55 per barrel by 01:49 GMT, while U.S. West Texas Intermediate (WTI) crude rose $1.05, or 1.64%, to $65.06 per barrel. Futures for WTI were not settled on Monday due to a U.S. holiday.
Recent Ukrainian drone attacks have shut down facilities accounting for at least 17% of Russia’s oil processing capacity, equivalent to 1.1 million barrels per day, according to Reuters calculations. Ukrainian President Volodymyr Zelensky said Sunday that Ukraine plans further strikes deep inside Russia following weeks of attacks on Russian energy assets.
After three and a half years of war, both Russia and Ukraine have intensified airstrikes in recent weeks. Russia has targeted Ukraine’s energy and transport systems, while Ukraine has attacked Russian refineries and pipelines.
Daniel Hines, a commodities analyst at ANZ Bank, noted on Tuesday, “Ongoing risks to Russia’s energy infrastructure remain high. Ukraine struck more Russian oil refineries over the weekend as it intensified attacks on infrastructure.”
Geopolitical tensions may also rise due to China’s vision for a “new world order.” President Xi Jinping on Monday presented a security and economic framework prioritizing the “Global South,” directly challenging the United States, during a summit with Russian and Indian leaders.
China and India are Russia’s largest crude oil buyers, with Russia being the world’s second-largest oil exporter. While former U.S. President Trump imposed additional tariffs on India for purchasing Russian crude, no similar measures were applied to China.
Investors are now awaiting an OPEC+ meeting on September 7 for any indications of further production increases from the group.
--Reuters
