Oil prices surged over 2% on Friday after the Russian port of Novorossiisk was halted from oil exports after being hit by a Ukrainian drone attack.
Brent crude futures rose $1.38, or 2.19%, to $64.39 a barrel, while WTI crude rose $1.40, or 2.39%, to $60.09 a barrel.
Russian officials said Friday’s attack damaged a ship, apartment blocks, and an oil tanker at the port, and injured three of the ship’s crew.
The attack on the Russian terminal was massive and had a greater impact than previous attacks.
Russia’s Novorossiisk port has halted oil exports, equivalent to 2.2 million barrels per day, or 2% of global supply, halt also crude supplies to pipeline monopoly Transneft.
The increasing intensity of these attacks could lead to permanent disruptions.
Ukraine announced on Friday that it separately struck an oil refinery in the Russian Saratov region and a fuel storage facility in nearby Engels.
Investors are monitoring the impact of Western sanctions on Russian oil supplies and trade flows, while trying to assess the impact of the latest attacks and what they will mean for Russian supplies in the long term.
On Friday, the UK issued a special license to two Bulgarian subsidiaries of the sanctioned Russian oil company Lukoil, allowing them to continue operating. However, the Bulgarian government has seized control of Lukoil’s assets.
The US imposed sanctions on the Kremlin, starting November 21, banning deals with Russian oil companies Lukoil and Rosneft, as part of its efforts to persuade them to engage in peace talks on Ukraine.
Approximately 1.4 million barrels per day of Russia’s oil, nearly one-third of its seaborne export potential, has been added to tanker stockpiles due to slowdowns in unloading operations due to US sanctions imposed on Rosneft and Lukoil.
After the companies’ oil supplies were cut off on November 21st, unloading these cargoes could become significantly more difficult.
Meanwhile, according to data released by Baker Hughes on Friday, the number of oil rigs drilling in the US increased by three in the week to November 14th, reaching 417.