Oil prices advanced on Friday to post more than a 4% gain for the week as intensified Ukrainian drone strikes on Russia’s energy infrastructure forced Moscow to restrict fuel exports and signaled potential cuts in crude output.
Brent crude oil, against which Nigerian oil is priced, rose by 21 cents or 0.3% to $69.63 a barrel at 07:35 in Nigeria, while U.S. West Texas Intermediate (WTI) crude gained 32 cents or 0.5% to $65.30 per barrel.
Both benchmarks are set for their strongest weekly performance since mid-June when Brent surged 11.7% and WTI jumped 13% during heightened Middle East tensions.
Analysts attributed the upward momentum to geopolitical risks, including NATO’s warning to Russia over future airspace violations and Moscow’s decision to curb key fuel exports.
“Gains were supported by ongoing Ukrainian drone strikes targeting Russian oil infrastructure, NATO’s warning to Russia it is ready to respond to future violations of its airspace and Russia’s move to halt key fuel exports,” said Tony Sycamore, IG analyst.
Deputy Prime Minister Alexander Novak confirmed on Thursday that Russia will implement a partial ban on diesel exports until the end of the year while extending an existing ban on gasoline shipments.
The reduced refining capacity has raised the likelihood of a cut in crude production, with several Russian regions already experiencing fuel shortages.
The developments have further tightened market conditions, pushing both Brent and WTI to their highest levels since August 1.
The gains were also reinforced by a surprise drop in U.S. weekly crude inventories, highlighting the demand strength in the world’s largest oil consumer.
However, upside momentum was capped by macroeconomic factors. U.S. gross domestic product expanded at an annualized rate of 3.8% in the last quarter, an upward revision that could influence Federal Reserve policy.
Analysts noted that stronger-than-expected economic growth may slow the pace of future interest rate cuts despite last week’s 25 basis points reduction, the first since December.
In addition, the Kurdistan Regional Government announced on Thursday that oil exports would resume within 48 hours under a landmark agreement.
The resumption could return as much as 500,000 barrels per day to the global market, partially offsetting concerns about Russian supply disruptions.
Daniel Hynes, analyst at ANZ, said geopolitical developments continue to dominate market sentiment.
“Geopolitical tensions reversed earlier losses after a landmark agreement was reached to allow the resumption of exports from Iraq’s Kurdistan, which could return up to 500kb/d to the global market.”
The Russia-Ukraine war remains a key driver of volatility, with markets closely watching the scale of infrastructure damage and the potential for further NATO responses.
For now, Brent and WTI are set to close the week significantly higher, underscoring the continued sensitivity of energy markets to geopolitical risks and supply constraints.