Core Insights - Oil prices have surged approximately 2% following a Ukrainian attack on Russia's Novorossiysk port, raising supply concerns in the market [1] - Brent crude prices rose by $1.50 (2.4%) to $64.51 per barrel, while US West Texas Intermediate increased by $1.57 (2.7%) to $60.26 per barrel [1] - The Novorossiysk port handled 3.22 million tonnes (mt) of crude oil in October, equating to 761,000 barrels per day, along with 1.79mt of oil products [1] Oil Supply and Demand Dynamics - Earlier in the week, both Brent and WTI benchmarks experienced a decline after the Organisation of the Petroleum Exporting Countries (OPEC) projected a balance between global oil supply and demand by 2026, contrasting previous expectations of a supply shortage [2] - The US Energy Information Administration reported a rise in crude inventories by 6.4 million barrels to 427.6 million barrels for the week ending 7 November [2] Sanctions and Market Impact - Ongoing sanctions against Russia have complicated global oil flows, with the US announcing a ban on transactions with Russian oil companies Lukoil and Rosneft, effective after 21 November [3] - JPMorgan estimates that approximately 1.4 million barrels per day of Russian oil, nearly one-third of the country's seaborne export capacity, is currently stored on tankers due to sanctions delaying unloading operations [3] Corporate Developments - US private equity firm Carlyle is reportedly considering options for acquiring Lukoil's overseas assets, which account for about 2% of global oil production [4] - Lukoil's planned asset sale to Swiss-based Gunvor was halted prior to the 21 November sanctions deadline [4] - Lukoil's international holdings represent around 0.5% of worldwide oil output and are valued at approximately $22 billion according to 2024 filings [5]
Oil prices surge after Ukrainian attack on major Russian port