Oil prices firmed on Thursday after Ukrainian attacks on Russia’s oil infrastructure signalled potential supply constraints, and stalled peace talks tempered expectations of a deal restoring Russian oil flows to global markets, though weak fundamentals kept gains limited.
Consequently, Brent crude rose 41 cents, or 0.65%, to $63.08 at 0659 GMT, while U.S. West Texas Intermediate rose 45 cents, or 0.76%, to $59.40.
Ukraine hit the Druzhba oil pipeline in Russia’s central Tambov region, a Ukrainian military intelligence source said on Wednesday, the fifth attack on the pipeline that sends Russian oil to Hungary and Slovakia.
The pipeline operator and Hungary’s oil and gas company later said supplies were moving through the pipeline as normal.
“Ukraine’s drone campaign against Russian refining infrastructure has shifted into a more sustained and strategically coordinated phase,” consultancy Kpler said in a research report, adding that strikes now target refineries in repeated cycles, aiming to keep key assets from stabilising.
“This has pushed Russian refining throughput down to around 5 million barrels per day between September and November, a 335,000 bpd year-on-year decline, with gasoline hit hardest and gasoil output also materially weaker,” the report added.
The perception that progress on a peace plan for Ukraine was stalling also supported prices, after U.S. President Donald Trump’s representatives emerged from peace talks with the Kremlin with no specific breakthroughs on ending the war. Trump said it was unclear what happens now.
“Crude will likely remain stuck in a narrow range while the Ukraine peace efforts grind on,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
Previously, expectations of an end to the war had pressured prices lower, as traders anticipated a deal would involve ending sanctions on Russia and allow Russian oil back into an already oversupplied global market.
Fitch Ratings on Thursday cut its 2025-2027 oil price assumptions to reflect market oversupply and production growth that is expected to outstrip demand.
