Crude oil gained about $1 on Monday as traders anticipated more US sanctions on Russian oil and Ukrainian attacks on Russian energy infrastructure that could disrupt supplies.
During the session, Brent crude futures appreciated by $1.07 or 1.58 per cent to $68.80 per barrel and the US West Texas Intermediate (WTI) crude futures improved by $1.14 or 1.79 per cent to $64.80 per barrel.
The US is trying to broker a peace deal between Ukraine and Russia to bring an end to the 3-and-half year war.
President Donald Trump said last Friday that he would impose sanctions on Russia if there was no progress toward a peaceful settlement in Ukraine in two weeks. He also threatened to slam India with harsh tariffs over its purchases of Russian oil.
Backing up his principal, US Vice President JD Vance said Russia had made “significant concessions” toward a negotiated settlement in the war.
Reuters reported that Ukraine has stepped up attacks on Russian energy infrastructure, launched a drone attack on Sunday that caused a huge blaze at the Ust-Luga fuel export terminal.
The fire at Russia’s Novoshakhtinsk refinery, following a Ukrainian drone attack, burned for a fourth day on Sunday. The refinery sells fuel mainly for export and has an annual capacity of 5 million metric tons of oil, or about 100,000 barrels per day.
Market analysts noted that impact of possible Russian supply disruptions was offset by a reversal of a series of production cuts by the Organisation of the Petroleum Exporting Countries and its allies (OPEC+), which is adding millions of barrels to the market.
Eight members of the oil exporters’ group – Saudi Arabia, Russia, the UAE, Kuwait, Oman, Iraq, Kazakhstan and Algeria – are scheduled to meet on September 7, when they are set to approve another boost following similar moves in the last five months.
OPEC+ began to unwind cuts of 2.17 million barrels per day in April with a boost of 138,000 barrels per day. Hikes of 411,000 barrels per day followed in May, June and July, despite falling oil prices and in August, the group approved a 548,000 barrels per day jump.
Also, the market will be anticipant next moves by the US Federal Reserve after the Chairman Jerome Powell on Friday signalled a possible interest rate cut at the US central bank’s meeting in September.