Oil Prices Rise After Ukrainian Attacks on Russian Energy Facilities

Oil prices have risen amid escalating Ukrainian drone attacks on key Russian energy infrastructure, including the Kirishi refinery and the Primorsk oil exporting terminal, which together represent a significant portion of Russia's crude processing and export capacity. These attacks have heightened concerns about potential disruptions in international oil markets, contributing to upward pressure on prices despite ongoing concerns about oversupply as OPEC+ plans to increase output. U.S. President Donald Trump has reinforced this pressure by calling for NATO countries to cease purchasing Russian oil and threatening fresh sanctions if this demand is met. Additionally, oil prices have benefited from strong refinery demand in China, declining U.S. crude inventories, and expectations of interest rate cuts by the U.S. Federal Reserve, which could boost fuel demand. However, softer U.S. job-creation data and rising inflation have raised worries about economic growth in the world's largest oil consumer, potentially tempering demand. Looking ahead, Goldman Sachs projects oil prices may decline further next year due to supply growth but notes possible early recovery if supply-demand dynamics rebalance, with factors like reduced U.S. shale output and potential OPEC production cuts playing key roles.