Oil gains almost 2% as Russian port suspends oil exports after Ukrainian attack
[LONDON] Oil prices climbed nearly 2 per cent on Friday (Nov 14), boosted by supply fears after the Black Sea port of Novorossiisk halted oil exports following a Ukrainian drone attack that hit an oil depot in the major Russian energy hub.
Brent crude futures were up US$1.04, or 1.65 per cent, at US$64.05 a barrel by 1428 GMT, while US West Texas Intermediate (WTI) crude advanced US$1.15, or 1.96 per cent, to US$59.84 a barrel.
The contracts were more or less stable on the week. At those levels, Brent was heading for a weekly gain of around 0.7 per cent and WTI a modest gain of 0.15 per cent.
Friday’s attack damaged a ship in port, apartment blocks and an oil depot in Novorossiisk, injuring three of the vessel’s crew, Russian officials said.
The port paused oil exports and oil pipeline monopoly Transneft suspended crude supplies to the outlet, said two industry sources.
“The intensity of these attacks has increased, it’s much more often. Eventually they could hit something that causes lasting disruption,” said Giovanni Staunovo, commodity analyst at UBS.
The market is trying to assess the impact of the latest attacks and what this means for Russian supply longer term, he said.
Industry sources say crude oil shipments via Novorossiisk reached 3.22 million tonnes, or 761,000 barrels a day, in October, with a total of 1.794 million tonnes of oil products exported.
Investors are also watching the impact of Western sanctions on Russian oil supply and trade flows.
Britain on Friday issued a special licence allowing businesses to continue working with two Bulgarian subsidiaries of sanctioned Russian oil firm Lukoil, as the Bulgarian government seized control of the assets.
The US imposed sanctions banning deals with Russian oil companies Lukoil and Rosneft after Nov 21 as part of efforts to bring the Kremlin to peace talks over Ukraine.
About 1.4 million barrels per day of Russia’s oil, or almost a third of seaborne export potential, has been added to stocks held on tankers as unloading slows due to the US sanctions against Rosneft and Lukoil, JPMorgan said on Thursday.
Unloading cargoes could become much more challenging after the Nov 21 cut-off to receive oil supplied by the companies, the bank added. REUTERS
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