Onome Amuge
Oil prices ticked higher on Friday after a Ukrainian drone attack forced a suspension of operations at Russia’s largest oil-loading facility on the Baltic coast, but lingering concerns about the health of U.S. demand kept gains in check.
Brent crude, the international benchmark, settled at $66.99 a barrel, up 62 cents, or 0.93 per cent, while U.S. West Texas Intermediate (WTI) ended the session at $62.69, a gain of 32 cents, or 0.51 per cent. Both benchmarks pared back earlier gains, reflecting the market’s struggle to balance geopolitical risks with macroeconomic headwinds.
The early rise was triggered by news that oil loadings had been suspended overnight at the port of Primorsk following a Ukrainian drone strike. Primorsk is the main outlet for Russian Urals crude, which has been rerouted in large quantities to Asian buyers since western sanctions cut Moscow out of European markets.
“Those attacks on Russian energy infrastructure have room to drag down Russian crude and refined product exports. The disruption risk is not trivial given the concentration of Russia’s export flows through a handful of ports,” said Giovanni Staunovo, analyst at UBS.
Yet traders quickly shifted focus back to the U.S. economy, where a combination of weaker labour market data and high inflation has raised questions about future demand growth. A benchmark revision from the U.S. Labor Department earlier in the week indicated the economy created 911,000 fewer jobs in the 12 months through March than previously estimated, a sharp reassessment that rattled sentiment in energy markets.
“The economic data is not supportive of a rally. The overall weight is down and the trend is bearish,” said John Kilduff, partner at Again Capital.
Adding to the gloom, U.S. consumer prices rose 0.4 per cent in August, the biggest monthly gain since January. The inflation data heightened expectations that the Federal Reserve may keep interest rates elevated for longer, a scenario that tends to pressure fuel consumption by slowing economic activity.
The market’s cautious mood followed heavy declines on Thursday, when Brent shed 1.7 per cent and WTI fell 2 per cent, underscoring the fragile footing of crude benchmarks despite geopolitical risks.
Beyond the U.S. outlook, traders are also weighing potential policy actions targeting Russian oil exports. Reports that the Trump administration is considering tariffs or sanctions designed to curb India and China’s intake of Russian barrels have added another layer of uncertainty. Both countries have emerged as Moscow’s biggest buyers since the invasion of Ukraine in 2022, cushioning the blow of Western sanctions.
“If tariffs are imposed, particularly on India and China, that could materially shift Russian flows off the market. But the market is waiting for concrete action rather than speculation,” Kilduff said.
On the supply front, India’s Adani Group has quietly moved to ban tankers sanctioned by Western countries from entering its ports, three sources told Reuters. The step could complicate Moscow’s ability to maintain current export levels, given India’s outsized role in absorbing Russian seaborne crude.
India has become the single-largest buyer of Russian oil shipped by sea, much of it transported on tankers under European Union, U.S. or British sanctions. Adani’s move, analysts said, could squeeze those logistics further and heighten competition for compliant vessels.
Meanwhile, global supply projections added to the cautious outlook. The International Energy Agency (IEA) said on Thursday that worldwide oil supply would rise faster than expected this year as OPEC+ members implement planned output increases. The agency’s assessment suggested that production gains, particularly from the U.S. and Brazil, would more than offset disruptions elsewhere.
By contrast, OPEC’s own monthly report, released later the same day, maintained relatively bullish forecasts for demand growth in both 2025 and 2026. The cartel said the global economy was maintaining a solid growth trend, arguing that consumption would remain robust despite tightening monetary policy in advanced economies.
