London: Global oil prices edged higher on Tuesday as traders weighed the risks of potential supply disruptions after drone attacks targeted key Russian refineries and export infrastructure. The market’s cautious optimism reflects the intersection of geopolitical tensions, production dynamics, and global economic expectations.
Brent crude futures gained 15 cents, reaching $67.59 per barrel, while U.S. West Texas Intermediate (WTI) crude rose by the same margin to $63.45 per barrel. The modest increase follows Monday’s gains, when Brent and WTI had climbed 45 cents and 61 cents, respectively, as markets digested news of the attacks and their possible impact on oil flows.
The recent strikes on Russian energy facilities, including the Primorsk export terminal and the Kirishinefteorgsintez refinery, have intensified concerns over potential interruptions in global crude supply. Russia remains a critical player in the oil market, accounting for over 10% of world production. Any disruption to its output, analysts warn, could ripple across international markets, driving prices upward.
Market observers note that targeting infrastructure such as export terminals represents a calculated move to limit Russia’s ability to sell oil internationally. Analysts from JP Morgan commented that such attacks could pressure global supply chains, creating temporary volatility even amid relatively stable overall production levels.
Meanwhile, U.S. policy continues to play a significant role in shaping oil market sentiment. Treasury Secretary Scott Bessent recently stated that the United States would refrain from imposing additional tariffs on Chinese goods to curb purchases of Russian oil, unless European nations follow suit. This policy stance underscores the delicate balance between trade negotiations and energy market stability.
Investors are also focused on the upcoming U.S. Federal Reserve meeting scheduled for September 16-17, where a widely anticipated rate cut could influence oil prices. Lower interest rates typically weaken the U.S. dollar, making crude oil more affordable for international buyers and potentially boosting demand for energy commodities.
Despite these immediate concerns, analysts stress that the broader oil market remains fundamentally balanced. HSBC projects a global supply surplus of 1.7 million barrels per day in the fourth quarter of 2025, expanding to 2.4 million barrels per day in 2026, largely due to OPEC+ gradually restoring previously cut production. HSBC expects the 1.65 million barrels per day production cut to be unwound over the next twelve months, highlighting the organization’s careful calibration of supply against demand.
However, Russia’s ability to meet OPEC+ production targets may be constrained, with HSBC lowering its end-2026 Russian output forecast by 300,000 barrels per day. Such limitations reflect the complex interplay between geopolitical disruptions, operational challenges, and market expectations.
As traders monitor these developments, oil prices remain sensitive to geopolitical events and policy decisions. While the attacks on Russian refineries pose immediate risks to supply, the longer-term trajectory of crude prices will depend on OPEC+ strategies, global demand trends, and the evolving geopolitical landscape.