Oil prices continued to climb in Asian trade on Monday, building on gains from the previous week as concerns over tightening supply intensified. Brent crude oil futures for May delivery rose by 32 cents, or 0.4%, to $85.66 a barrel, while the April contract for U.S. West Texas Intermediate (WTI) crude increased by 40 cents, or 0.5%, reaching $81.44.
Last week saw oil prices surge nearly 4%, driven by growing perceptions of supply constraints. Further exacerbating these concerns were additional attacks on Russian energy infrastructure, heightening risks in the market. Vandana Hari, founder of oil market analysis provider Vanda Insights, noted that strikes on Russian refineries added $2-$3 per barrel of risk premium to crude prices last week, a trend that has persisted with more attacks over the weekend.
The recent strikes have had tangible effects, including a brief fire at the Slavyansk refinery in Krasnodar, which processes 8.5 million metric tons of crude oil annually, or 170,000 barrels per day. A Reuters analysis indicates that these attacks have resulted in the idling of approximately 7% of Russian refining capacity in the first quarter alone.
Despite the current upward trajectory in prices, analysts suggest that crude markets are awaiting fresh signals to determine the next substantial movement. While the supply disruptions in Russia contribute to short-term price volatility, broader market dynamics and geopolitical factors will continue to shape the trajectory of oil prices in the coming weeks.
The situation underscores the vulnerability of global oil markets to geopolitical tensions and supply disruptions. As uncertainty persists, stakeholders closely monitor developments in key oil-producing regions for potential impacts on supply and prices
