The price of Brent crude oil surged by US$1.50, or 2.4 per cent, to US$64.51 per barrel following a Ukrainian attack on Russia’s Novorossiysk port, which disrupted oil shipments and stirred global supply concerns.
Concurrently, the US West Texas Intermediate (WTI) crude rose US$1.57, or 2.7 per cent, to $60.26 per barrel, marking a sharp rebound in oil prices after recent volatility.
The attack, carried out by Ukrainian drones and missiles on the Russian Black Sea port’s Sheskharis oil terminal, temporarily halted 2 per cent of the world’s oil supply, causing a spike in prices globally.
Novorossiysk is Russia’s largest Black Sea crude export hub, handling about 3.22 million tonnes (around 761,000 barrels per day) of crude oil and 1.79 million tonnes of oil products in October.
The temporary disruption in exports from this key terminal intensified fears of supply shortages amid an already complex market situation influenced by sanctions and geopolitical tensions.
Operations at the port resumed swiftly after the attack, with two crude tankers reported loading oil at the terminals shortly thereafter, which eventually eased immediate supply pressures, though market uncertainties remain high.
Earlier in the week, both Brent and WTI prices dipped as the Organisation of the Petroleum Exporting Countries (OPEC) revised its outlook to project a balance between global oil supply and demand by 2026, shifting away from prior expectations of a supply shortfall.
Meanwhile, the US Energy Information Administration (EIA) reported a larger-than-expected increase in US crude inventories, rising by 6.4 million barrels to 427.6 million barrels for the week ending November 7, further weighing on prices initially.
Sanctions against Russia have added another layer of complexity to global oil flows.
The US recently announced a ban on transactions with Russian oil giants Lukoil and Rosneft, effective November 21, as part of efforts to pressure the Kremlin over the conflict in Ukraine.
These sanctions have slowed tanker unloading operations, with JPMorgan estimating that about 1.4 million barrels per day of Russian oil — nearly a third of Russia’s seaborne export capacity — is being stored on tankers while unloading delays persist.
Lukoil, which contributes around 2 per cent of global oil production domestically and internationally, plans to sell its overseas assets valued at approximately $22 billion.
These assets represent about 0.5 per cent of the worldwide oil supply.
The company’s attempted sale of assets to the Swiss-based merchant group Gunvor was halted in light of the looming sanctions deadline.
Meanwhile, US private equity firm Carlyle is reportedly exploring acquisition options for Lukoil’s overseas holdings.
Despite the resumption of oil shipments from Novorossiysk, oil markets remain sensitive to ongoing geopolitical tensions and the implications of Western sanctions.
Analysts note that the volatile situation could keep oil prices elevated or subject to sudden fluctuations depending on further developments in Ukrainian attacks on Russian infrastructure or changes in sanction policies.
Goldman Sachs has forecasted a possible decline in oil prices through 2026 due to surplus supply, but acknowledged a potential rise above US$70 per barrel if Russian production falls further.
Overall, the recent Ukrainian strike and subsequent supply disruptions in Novorossiysk have underscored the fragile balance in global oil markets, where geopolitical risks and sanctions against Russia are playing an increasingly significant role alongside supply-demand fundamentals.
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