Oil prices moved higher on Friday, gaining roughly 1% after a Ukrainian drone strike damaged an oil depot in Novorossiysk, one of Russia’s key Black Sea export terminals.
By 07:01 GMT, Brent crude futures were up 79 cents, or 1.25%, at $63.80 a barrel, while U.S. West Texas Intermediate crude climbed 82 cents, or 1.38%, to $59.50 a barrel.
Both benchmarks initially jumped more than 2% during early Asian hours before giving back part of those gains. For the week, Brent was up 0.28%, while WTI was down 0.38%.
According to Russian authorities, Friday’s attack damaged a vessel docked at the port, residential buildings, and an oil storage facility, leaving three crew members injured.
“Ukrainian drone attacks … have sparked new fears of oil supply flow disruptions as this port is the second largest oil export hub in Russia,” said June Goh, senior oil market analyst at Sparta Commodities, highlighting that the incident occurred only two weeks after a major strike in Tuapse.
Goh added, “The extent of the damage is not yet known but if the pattern of escalation continues, then there would be a supply curtailment both in crude and product exports out of Russia.”
Industry data shows that Novorossiysk exported about 3.22 million tonnes of crude in October—roughly 761,000 barrels per day—alongside 1.794 million tonnes of refined products.
The uptick in prices followed a steep 3% drop in both Brent and WTI on Wednesday after OPEC projected that global supply would align with demand by 2026, moving away from earlier expectations of a deficit.
On Thursday, the U.S. Energy Information Administration reported a much larger-than-expected increase in crude inventories last week, even as gasoline and distillate draws disappointed. Crude stocks rose by 6.4 million barrels to 427.6 million, far above analysts’ expectations for a 1.96 million barrel build.
Markets are also assessing how Western sanctions will affect Russian oil flows. The U.S. recently banned dealings with Rosneft and Lukoil after November 21 to pressure Moscow into peace negotiations.
JPMorgan estimated on Thursday that about 1.4 million barrels per day of Russian oil—nearly one-third of its seaborne export capacity—has accumulated in floating storage as sanctions slow discharge operations. The bank warned that unloading cargoes could become even more difficult after the November 21 deadline.