Bold reality check: oil prices edged higher as attacks on Russia’s oil infrastructure raised the specter of tighter supply, even as peace talks lag and market fundamentals remain soft. Brent crude gained 41 cents to $63.08 a barrel, and U.S. WTI added 45 cents to $59.40, around 0659 GMT.
Ukraine targeted Russia’s Druzhba pipeline in the Tambov region, the fifth strike on the conduit that ships Russian oil to Hungary and Slovakia. Both the pipeline operator and Hungary’s energy firm later said flows were returning to normal, though the incident underscored the fragility of energy routes amid ongoing conflict. Analysts from Kpler described Ukraine’s drone campaign against Russian refining assets as entering a more sustained, coordinated phase, with strikes cycling at refineries to prevent any asset from regaining stability. The effect has been a decline in Russian refining throughput to roughly 5 million barrels per day from September to November, a year-over-year drop of about 335,000 bpd, with gasoline the hardest-hit product and weaker gasoil output as well.
Market sentiment also reflected stalled peace negotiations. After U.S. negotiators left talks with Moscow without concrete breakthroughs, traders treated a peace deal as unlikely to promptly unlock Russian oil for a world already dealing with ample supply. This backdrop helped keep price gains modest even as supply concerns mounted.
Industry observers note that crude is likely to trade in a narrow band as the Ukraine conflict continues to weigh on markets and peace prospects oscillate. Fitch Ratings also weighed in, trimming its oil price assumptions for 2025–2027 to reflect persistent oversupply and a growth trajectory in production that could outpace demand.
Reporting contributors: Mohi Narayan (New Delhi) and Colleen Howe (Beijing). Editing: Michael Perry and Thomas Derpinghaus.
Context about coverage: This report tracks how sanctions on Russia, evolving trade routes, and energy policy shifts influence global oil flows, refinery demand, and the broader fuel market landscape in major hubs, including emerging markets and EV-centric regions like China.
