Oil prices climbed more than 2% in early Friday trade after a Ukrainian drone strike damaged an oil depot in the Russian Black Sea port of Novorossiysk, one of Moscow’s key export hubs. Brent rose 2.1%, while WTI gained 2.4%.
Local authorities in Russia’s Krasnodar region said drone debris struck three residential apartments, a trans-shipment oil depot and nearby coastal facilities. Novorossiysk is a major outlet for Russian crude and condensate exports, handling roughly 2.2 million barrels per day.
Prices had stabilised on Thursday as traders weighed the impact of sweeping U.S. sanctions on Russian oil giants Lukoil and Rosneft, which take effect on November 21 and bar transactions with the companies. JPMorgan said nearly 1.4 million barrels per day of Russian crude — almost a third of its seaborne flows — is now sitting on tankers as discharge slows under sanction pressure. The bank warned that unloading cargoes after the cut-off date could become “significantly more challenging.”
While the damage appears limited to the Sheskharis transshipment terminal, the incident serves as a reminder of the dual risks facing Russian exports: Ukrainian drone attacks and tightening Western sanctions.
This article was written by Eamonn Sheridan at investinglive.com.