Oil prices surged over 3% on Monday as Norway’s Johan Sverdrup oilfield halted production due to a power outage, tightening North Sea supply. Brent crude rose $2.26 (3.2%) to settle at $73.30 per barrel, while WTI gained $2.14 (3.2%) to close at $69.16. Repairs at Kazakhstan’s Tengiz oilfield, cutting output by up to 30%, further supported prices.
The escalation of the Russia-Ukraine war also contributed to the rally. The Biden administration approved Ukraine’s use of U.S.-made weapons for strikes deep into Russia, raising geopolitical tensions. Analysts suggested further oil price increases could follow if Ukrainian attacks target Russian energy infrastructure.
Last week, prices fell over 3% on weak Chinese refinery data and forecasts from the International Energy Agency projecting global oil supply to exceed demand by over 1 million barrels per day by 2025. Traders are shifting WTI positions to January contracts, with the market entering contango for the first time since February, reflecting expectations of rising prices.