Oil prices settled higher Monday as Ukrainian drone strikes on Russian refineries and U.S. pressure on NATO allies to halt Russian crude purchases added a risk premium, though gains were modest.
Brent crude settled at $67.44, up 45 cents (0.67%), while U.S. West Texas Intermediate (WTI) closed at $63.30, up 61 cents (0.97%). Both benchmarks had already gained more than 1% last week after Ukraine targeted Russia’s Primorsk terminal, the country’s largest crude export hub.
The latest attack forced Russia’s Kirishi refinery to halt a key processing unit, sidelining roughly 355,000 bpd, or 6.4% of Russia’s refining capacity. “Behind the scenes there are a lot of concerns around heavy oil and tight diesel supplies, keeping the market supported,” said Phil Flynn of Price Futures Group.
U.S. President Donald Trump added to bullish sentiment by warning NATO partners that Washington would impose additional sanctions on Russia only if they also stopped buying Russian oil. Analysts noted that while such a coordinated move remains uncertain, even the prospect raises questions over supply flows.
Supporting factors also included firm refinery demand in China last month and a recent U.S. crude inventory draw, though weak Chinese macro data capped upside. Traders are also eyeing this week’s Federal Reserve policy meeting, where expectations are building for a rate cut. “A more aggressive Fed cut would put downward pressure on the dollar and give oil a boost,” Flynn added. A weaker dollar makes crude cheaper for non-U.S. buyers.