Oil prices advanced on Monday, extending last week’s gains as investors priced in heightened risks of supply disruptions from escalating geopolitical tensions.
Brent crude oil, against which Nigerian oil is priced, closed higher by $1.07 or 1.58 percent at $68.80 per barrel, while West Texas Intermediate (WTI) crude gained $1.14, or 1.79 percent, to $64.80 per barrel.
The upward movement was driven by expectations of additional U.S. sanctions on Russian oil exports and continued Ukrainian attacks on Russian energy facilities.
Over the weekend, Ukrainian forces launched a drone strike on the Ust-Luga fuel export terminal, causing a large-scale fire, according to Russian officials.
In a separate incident, a blaze at Russia’s Novoshakhtinsk refinery persisted for a fourth consecutive day following another drone attack. The refinery, which processes 5 million metric tons of crude annually, supplies mainly to international markets.
Market analysts highlighted the possibility of significant supply strain if further sanctions are implemented. Phil Flynn, Senior Analyst at the Price Futures Group, noted that “there seems to be a sense the peace talks are dragging on, and sanctions on Russia could follow if negotiations fail to progress.”
U.S. President Donald Trump reiterated on Friday that he would impose sanctions on Russia should there be no progress toward a peace settlement in Ukraine within two weeks. He also signaled the possibility of imposing tariffs on India over its continued purchases of Russian crude.
Meanwhile, U.S. Vice President JD Vance confirmed that Russia had made “significant concessions” in recent negotiations aimed at ending the war.
However, potential supply concerns were tempered by OPEC+ production adjustments. The oil exporters’ alliance has reversed earlier output cuts, adding millions of barrels to the market. Eight OPEC+ members are scheduled to meet on September 7 to formalize further production increases.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, explained that while geopolitical risks are pushing prices higher, “the additional barrels coming from OPEC+ will act as a counterweight, limiting upside momentum.”
Investor sentiment also strengthened after U.S. Federal Reserve Chair Jerome Powell signaled the possibility of an interest rate cut at the central bank’s September meeting.
Analysts believe lower borrowing costs could bolster global economic activity and energy demand.
Despite the price recovery, some market observers remain cautious about sustained momentum. Priyanka Sachdeva, Senior Market Analyst at Phillip Nova, warned that “markets are increasingly convinced that U.S. tariffs may hinder growth, which would ultimately cap fuel demand.”
The global oil market continues to weigh the balance between supply disruption risks from Russia and added OPEC+ production, with geopolitical developments and U.S. policy decisions expected to determine the near-term price trajectory.