Oil prices surged in the international market on Monday as fresh Ukrainian strikes on Russian facilities raised fears of supply disruptions, while growing expectations of a US interest rate cut lifted hopes for stronger global growth and fuel demand.
By early trading, Brent crude futures were up 6 cents at $67.79 a barrel, while West Texas Intermediate (WTI) gained 9 cents to reach $63.75.
The modest rise followed a wave of Ukrainian drone attacks over the weekend. One strike forced a reduction in the output of a reactor at one of Russia’s largest nuclear plants and triggered a fire at the Ust-Luga fuel export terminal.
In another incident, a blaze at the Novoshakhtinsk refinery in southern Russia was still burning on Sunday, four days after it was first hit. The facility, which mainly supplies fuel for export, has the capacity to process about 100,000 barrels of oil a day.
Analysts say Ukraine’s strikes have increased the risks of further supply shocks. “Given the success that Ukraine is having with its targeting of Russian oil infrastructure, the risks for crude oil are shifting to the topside,” said IG market analyst Tony Sycamore.
The attacks come at a delicate moment in the conflict. US Vice President JD Vance said on Sunday that Russia had made “significant concessions” in talks aimed at a possible settlement.
He noted that Moscow had backed away from its early demands to install a pro-Russian government in Kyiv and had accepted the idea of security guarantees for Ukraine’s territorial integrity.
Still, US President Donald Trump struck a tougher tone on Friday, warning he would impose sanctions on Russia if no progress was made toward peace within two weeks.
At the same time, financial markets drew some comfort from signals by Federal Reserve Chair Jerome Powell that a rate cut may be on the table at the bank’s meeting next month. Analysts say looser US monetary policy could give the global economy a lift, boosting demand for oil and other commodities.
“A risk-on tone across markets boosted investor appetite across the commodities complex, aided by renewed supply side issues across energy and metals,” ANZ analysts wrote in a note.
