Global crude oil prices experienced a modest uptick early Monday amid growing concerns over supply disruptions triggered by recent drone attacks targeting Russian energy infrastructure.
Brent crude futures edged up 0.07% to trade at $67.37 per barrel, slightly higher than the previous close of $67.32. Meanwhile, the U.S. benchmark West Texas Intermediate (WTI) saw a 0.08% increase to $63.71, up from $63.66.
The escalation emerged after Ukrainian drones struck the Kursk Nuclear Power Plant in Russia, igniting a fire and damaging a transformer. The incident forced a 50% output reduction at one of the plant’s reactors, as confirmed by the facility’s press office early Sunday. The Kursk facility is critical, supplying power to 19 regions within Russia’s Central Federal District.
Further compounding supply fears, a fire broke out at the terminal in Ust-Luga, in Russia’s Leningrad region near St. Petersburg, following drone attacks. Regional Governor Aleksandr Drozdenko reported that 10 Ukrainian drones were intercepted over the port area close to the Estonian border. Novatek, Russia’s natural gas producer overseeing operations at the terminal, has commenced repairs post-incident.
Ukraine’s military and security forces confirmed damage inflicted on the Ust-Luga terminal, describing it as a vital logistics hub facilitating Russia’s energy exports via the Baltic Sea. The terminal reportedly supports a “shadow fleet” circumventing oil sanctions imposed on Moscow.
Meanwhile, former U.S. President Donald Trump announced intentions to evaluate progress toward resolving the Russia-Ukraine conflict within two weeks, hinting at potential new sanctions on Russia.
These geopolitical developments, combined with dovish remarks from U.S. Federal Reserve Chair Jerome Powell at the Jackson Hole symposium, where expectations soared for a September interest rate cut, bolstered crude demand sentiment. Lower rates typically encourage economic growth and energy consumption, further underpinning oil prices.
