Oil prices climbed on Monday as traders weighed concerns that Russian supply could be disrupted by more U.S. sanctions and Ukrainian attacks targeting energy infrastructure in Russia.
Brent crude futures rose 39 cents, or 0.6%, to $68.12 by 1023 GMT, and West Texas Intermediate (WTI) crude futures gained 42 cents, or 0.7%, to $64.08.
“The market is somewhat concerned that these peace negotiations are going nowhere,” said Ole Hansen, head of commodity strategy at Saxo Bank.
“The market is looking for supply to exceed demand in the autumn months, but in the short term that’s being challenged by a potential geopolitical disruption.”
U.S. President Donald Trump warned again on Friday that he would impose sanctions on Russia if there was no progress toward a peaceful settlement in Ukraine in two weeks.
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He has also said he may hit India with harsh tariffs over its purchases of Russian oil.
At the weekend, U.S. Vice President JD Vance said Russia had made “significant concessions” toward a negotiated settlement in the 3-1/2-year war.
Ukraine, which has repeatedly targeted Russian energy infrastructure during the war, according to Reuters, launched a drone attack on Sunday that sparked a huge blaze at the Ust-Luga fuel export terminal, Russian officials said.
A fire at Russia’s Novoshakhtinsk refinery, caused by a Ukrainian drone attack, was burning for the fourth day on Sunday, the region’s acting governor said.
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.
Softening the worries about Russian supply disruptions was OPEC+’s reversal of a series of production cuts, which is adding millions of barrels to the market, Saxo Bank’s Hansen said.
Eight members of the oil exporters’ group are scheduled to meet on Sept. 7, when they are set to approve another boost.
Investors’ risk appetite improved following Federal Reserve Chair Jerome Powell’s signal on Friday of a possible interest rate cut at the U.S. central bank’s meeting in September.
But despite that, both benchmark oil prices appear to lack momentum, said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova, adding that markets seem increasingly convinced that Trump’s tariffs will hit economic growth.
