Global Brent crude futures have jumped up 46 cents after a drone hit the Russian Novatek gas-condensate terminal on the Baltic coast, Bloomberg reports.
This surge is the highest one recorded since November, and amid rising geopolitical tensions, including the Israel-Hamas war, analysts expect that market supplies will remain untouched.
The drone attack led to disruptions in Russian crude flow into the market, resulting in an immediate surge of West Texas Intermediate futures – by 2.4%, while Brent crude futures rose by 1.9%.
Traders in the Middle East are anticipating prolonged disruptions – with blockages in the Red Sea and Suez Canal, while the U.S. is undertaking military action to curb attacks on vessels by Iran-backed Houthi rebels in Yemen.
“Military action to deter the assaults will take time, according to a Biden administration official, Jon Finer, who hinted Washington could take extra measures in the coming days,” Bloomberg writes.
According to Reuters, citing City Index analyst Fiona Cincotta, oil traders will not push for higher prices just yet, as they await “hard evidence of supply disruption”.
Oil prices are expected to remain stable at the current level, energy trader Gunvor Group told Reuters, adding that the blockade in the Red Sea is unlikely to have a major impact on oil production.
Elsewhere, Libya’s National Oil Corp. announced that oil flows from the Sharara field, which had stopped for three weeks, would resume. This field previously produced about 270,000 barrels a day.
