UPDATE: Oil prices have surged by over $1 a barrel following significant developments involving drone attacks in Ukraine and OPEC’s recent production decision. As of 9:14 a.m. CDT (1514 GMT), Brent crude futures increased by $1, or 1.6%, reaching $63.38 a barrel, while U.S. West Texas Intermediate (WTI) crude climbed 94 cents, or 1.61%, to $59.49 a barrel.
This dramatic rise comes after Ukrainian forces targeted Russian oil tankers, intensifying military operations in the Black Sea. The drone strikes have heightened market tension, with analysts noting an optimistic outlook fueled by OPEC’s decision to maintain current output levels for the first quarter of 2026. Phil Flynn, senior analyst at the Price Futures Group, stated, “Ukrainian drone attacks on the Russian shadow fleet, along with OPEC’s commitment to steady production, has the market in an optimistic state.”
The situation escalated further as reports confirmed that one of the three mooring points at the Caspian Pipeline Consortium’s Novorossiysk terminal, which transports 1% of global oil, was damaged, temporarily halting operations. However, Chevron, a CPC stakeholder, assured that loading activities were ongoing at Novorossiysk, indicating resilience in supply amid conflict.
The drone attacks on the CPC terminal, coupled with the ongoing military conflict, are driving oil prices higher, according to UBS analyst Giovanni Staunovo. The heightened activity in the Black Sea also follows recent remarks by U.S. President Donald Trump, who declared the airspace around Venezuela closed, adding further uncertainty to the global oil market. Trump’s comments, made in a conversation with Venezuelan President Nicolas Maduro, signal potential disruptions from one of the world’s significant oil producers.
OPEC and its allies had previously agreed in early November to pause production increases, aiming to prevent a potential supply glut. LSEG senior analyst Anh Pham noted that the market is responding positively to OPEC’s decision, stating, “For some time, the narrative has centered on an oil glut, so OPEC+’s decision to maintain its production target provided some relief.”
Despite the positive momentum, Brent and WTI crude futures experienced a decline on Friday, settling lower for the fourth consecutive month, the longest losing streak since 2023. Market analysts remain watchful as global oil demand continues to rise amidst concerns about supply stability.
As this situation evolves, analysts and investors will be keen to monitor the implications of military actions in Ukraine and OPEC’s strategic decisions on the oil market. The balance between geopolitical tensions and production strategies will be critical in determining future price movements in the coming weeks.
Stay tuned for more updates as this story develops.
