SINGAPORE: Oil prices held steady on Monday as investors weighed the potential disruption to Russian crude and fuel exports following Ukrainian drone strikes on key refineries, while also tracking U.S. demand signals ahead of a pivotal Federal Reserve meeting.
Brent crude futures rose three cents to $67.02 a barrel by 0009 GMT, while U.S. West Texas Intermediate (WTI) added eight cents to $62.77. Both benchmarks gained more than one percent last week after Ukraine intensified attacks on Russian energy infrastructure, including the Primorsk terminal, Russia’s largest oil export hub, and the Kirishinefteorgsintez refinery, one of its two biggest refineries.
“The attack suggests a growing willingness to disrupt international oil markets, which has the potential to add upside pressure on oil prices,” JPMorgan analysts led by Natasha Kaneva wrote in a note, referring to the strike on Primorsk.
Primorsk, with a loading capacity of about 1 million barrels per day, is the biggest export port in western Russia. The Kirishi refinery, operated by Surgutneftegaz, processes around 17.7 million metric tons of crude per year (355,000 bpd), equivalent to 6.4 percent of Russia’s total output.
Despite the escalating strikes, a company in Russia’s Bashkortostan region will keep production steady following a drone attack on Saturday, according to regional governor Radiy Khabirov.
Mounting Political Pressure
The attacks come as political pressure on Moscow intensifies. U.S. President Donald Trump reiterated on Sunday that he is prepared to impose fresh sanctions on Russia but called on Europe to align more closely with Washington’s stance.
“Europe is buying oil from Russia. I don’t want them to buy oil,” Trump told reporters. “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.”
Trade Talks in Focus
Investors are also monitoring U.S.–China trade talks in Madrid, which began on Sunday. Washington has been pressing its allies to impose tariffs on Chinese imports in response to Beijing’s continued purchases of Russian oil.
Domestic Demand Questions
Concerns about U.S. fuel consumption remain in the backdrop after softer job creation data and rising inflation last week renewed doubts over growth in the world’s largest oil consumer. The Federal Reserve is expected to cut interest rates when it meets on September 16–17, a move closely watched by energy markets for its implications on demand.
