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Oil prices stabilized as Russia resumed Black Sea exports after a brief halt, while renewed Ukrainian attacks and Western sanctions keep supply risks elevated.

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A Volatile Week Ends With Cautious Calm

Global oil markets opened the week on a steadier footing after days of turbulence triggered by disruptions at one of Russia’s busiest export hubs. Prices inched upward on Monday, signaling cautious optimism among traders even as the broader geopolitical picture remains fraught. With attacks on Russian energy facilities and renewed Western sanctions clouds hovering over supply, investors appear braced for another unpredictable stretch in the global oil landscape.

A Disruption That Rippled Across Global Supply

Russia’s Novorossiysk terminal, an essential gateway for crude shipments through the Black Sea was forced offline for two days following a Ukrainian strike, briefly removing roughly 2% of global oil supply from the market. The shutdown also affected a linked Caspian Pipeline Consortium facility, amplifying concerns among energy traders already on edge from the escalating drone warfare between Russia and Ukraine.

The temporary outage sent both Brent and West Texas Intermediate (WTI) benchmarks surging more than 2% on Friday, offering a modest weekly gain after days of volatility. By Monday afternoon in London, the momentum had largely cooled: Brent added just 7 cents to reach $64.46 per barrel, while WTI ticked up by 3 cents to $60.12, a snapshot of a market trying to find its footing.

Shipments Restart, but Tensions Persist

Oil loadings resumed at Novorossiysk on Sunday, according to industry sources and tracking data, easing immediate concerns over prolonged supply interruptions. Despite the rebound in operations, growing evidence of Ukrainian strikes inside Russia continues to unsettle investors.

Ukraine’s military confirmed it targeted the Ryazan oil refinery over the weekend, while Kyiv’s General Staff reported that another strike hit the Novokuibyshevsk refinery in the Samara region. Each additional attack reinforces fears that Russia’s refining and export capacity may face sustained pressure, an ongoing variable that traders can’t ignore.

Meanwhile, Western sanctions are adding another layer of complexity. The United States has imposed new restrictions on dealings with Russian energy firms Lukoil and Rosneft, aiming to increase diplomatic pressure on Moscow. President Donald Trump added fuel to the debate on Sunday, announcing Republican-led efforts to penalize any nation conducting business with Russia, and hinting that Iran could soon join that list.

Analysts Weigh Long-Term Supply Uncertainty

Market analysts say the question now isn’t whether Ukraine’s strikes matter, it’s how deeply they will reshape Russia’s future export reliability.

Toshitaka Tazawa, an analyst at Fujitomi Securities, noted that traders are still trying to understand the long-term implications. “The market is attempting to assess how these ongoing attacks could reshape Russia’s crude export flows over time,” he said, underscoring the growing sense of unpredictability stalking the market.

UBS analyst Giovanni Staunovo echoed this caution, emphasizing that although offshore oil volumes have increased, onshore inventories have not yet shown signs of swelling, a signal that underlying demand remains firm. He expects prices to dip slightly in the near term but maintains a more positive outlook heading into the second half of 2026.

Surplus Looms, But Risk Factors Multiply

Beyond the immediate supply disruptions, longer-term challenges are also taking shape. A report from ING projected that the global oil market is likely to experience a substantial surplus through 2026, driven by rising production levels and uneven demand recovery.

Still, the report warns that geopolitical risks could override the surplus narrative. Ukraine’s intensifying drone campaign against Russian infrastructure introduces a level of uncertainty that models struggle to price in. ING also highlighted Iran’s recent seizure of a tanker in the Gulf of Oman, an event that revived longstanding concerns about the security of the Strait of Hormuz, a vital maritime corridor for roughly 20 million barrels per day of global oil shipments.

Latest trading data shows that speculative investors boosted their net long positions in ICE Brent futures by more than 12,000 contracts last week, bringing total longs to nearly 165,000. ING suggested this was driven largely by short-covering, as some traders appear unwilling to take bearish positions while supply risks remain unpredictable.

Adding to the market’s complexity, OPEC+ has opted to maintain a steady pace, raising December output targets by 137,000 barrels per day, matching increases set for October and November, while planning a temporary pause on further hikes during the first quarter of next year.

A Market Balancing Between Recovery and Risk

Despite the resumption of operations at Novorossiysk, global oil markets remain far from stable. The fragile balance between a projected supply surplus and mounting geopolitical tensions suggests that price volatility may remain a defining feature in the months ahead.

Whether Ukraine’s campaign significantly impairs Russia’s export capability or whether Western sanctions bite harder, will likely determine the next major swing in oil prices. For now, investors are watching every development closely, navigating a market where the next disruption could be just one drone strike or policy announcement away.

 

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