Global oil market stays calm despite strikes on key Russian refineries

SINGAPORE: Oil prices held largely steady on Monday as global investors weighed the potential fallout from a series of Ukrainian drone strikes on major Russian oil infrastructure, while also keeping an eye on signs of growing fuel demand in the United States.

Brent crude futures inched up by 3 cents to reach $67.02 a barrel in early trade, while US West Texas Intermediate (WTI) crude rose 8 cents to $62.77 a barrel. The modest moves come after both benchmarks gained more than 1 percent last week, lifted by concerns that the escalating attacks could disrupt Russia’s crude and fuel exports.

Attacks target key Russian oil hubs

Ukraine has intensified its strikes on Russian energy assets in recent weeks, with two of the latest attacks targeting the Primorsk oil terminal and the Kirishinefteorgsintez refinery.

Primorsk, located on the Baltic Sea, is the largest oil export port in western Russia and can load around one million barrels of crude per day. Any prolonged disruption there could have a ripple effect across international oil markets.

The Kirishi refinery, run by Surgutneftegaz, processes around 17.7 million metric tonnes of crude annually, equal to about 355,000 barrels per day or 6.4 percent of Russia’s total refining capacity.

JPMorgan analysts, led by Natasha Kaneva, said in a note that the attack on Primorsk “suggests a growing willingness to disrupt international oil markets, which has the potential to add upside pressure on oil prices.”

Production continues despite strikes

Despite the recent attacks, Russia has signalled that it intends to keep its oil output steady. In Bashkortostan, a regional oil company targeted by a drone strike over the weekend has vowed to maintain production levels, according to Governor Radiy Khabirov.

For now, investors appear to be taking a wait-and-see approach, trying to assess whether these strikes will lead to lasting supply disruptions or remain isolated incidents.

Market watchers are also tracking US fuel demand trends, which could offer clues about consumption levels as the country heads into the final quarter of the year. Any signs of stronger demand in the world’s largest oil consumer could provide support for prices in the weeks ahead.

While oil markets remain calm for now, analysts warn that further attacks on Russian energy facilities could inject fresh volatility into global prices.