Crude oil prices rise over 4 percent, marking biggest weekly gain in three months

Oil prices ticked higher on Friday, with both major benchmarks heading for their sharpest weekly gain since mid-June. The rally comes as Ukraine’s strikes on Russian energy facilities prompted Moscow to curb fuel exports and signal a possible cut in crude production.

Brent crude futures rose 17 cents, or 0.24 percent, to $69.59 a barrel by 5:02 GMT, while U.S. West Texas Intermediate (WTI) gained 24 cents, or 0.37 percent, to $65.22 a barrel. Both contracts are set to finish the week more than 4 percent higher, marking their strongest weekly advance since June 13.

Russia-Ukraine war impacts crude supply

The rise in oil prices was underpinned by continued Ukrainian drone attacks on Russian oil facilities, NATO’s warning that it is prepared to respond to any future airspace violations and Moscow’s decision to suspend key fuel exports.

Russian Deputy Prime Minister Alexander Novak announced on Thursday that the government will impose a partial ban on diesel exports through the end of the year, while extending an existing ban on gasoline shipments. The reduced refining capacity has brought Russia close to cutting crude output, with several regions already experiencing shortages of certain fuel grades.

Both benchmarks hit their highest levels since August 1 this week, supported by an unexpected drawdown in U.S. crude inventories alongside Ukraine’s strikes on Russian energy infrastructure.

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Kurdistan oil exports to resume

Gains in oil prices, however, were tempered after the U.S. Commerce Department’s Bureau of Economic Analysis reported on Thursday that gross domestic product expanded at a stronger-than-expected annualized pace of 3.8 percent last quarter.

The robust data could prompt the Federal Reserve to move more cautiously on monetary easing. The central bank delivered a 25-basis-point rate cut last week, its first since December 2024, and had previously signaled additional reductions ahead.

Adding to the downward pressure, the Kurdistan Regional Government announced on Thursday that oil exports are set to resume within 48 hours. Eight oil firms operating in Iraqi Kurdistan, accounting for more than 90 percent of the region’s production, said on Wednesday that they had reached agreements in principle with Iraq’s federal government and the Kurdistan Regional Government (KRG) to restart exports.

The deal would end a prolonged pause and enable the flow of roughly 230,000 barrels per day through the Iraq-Turkey pipeline, which has been shut since March 2023.