Oil Prices Rise Amid Ongoing Ukraine-Russia Tensions

NEW YORK, USA — Oil prices rose slightly on Friday as diminished hopes for a peace deal between Russia and Ukraine led to increased risk premiums for sellers. Brent crude futures climbed by 12 cents to $67.79 a barrel as of 0633 GMT, while West Texas Intermediate (WTI) crude futures gained 13 cents, reaching $63.65.

Both contracts had risen more than 1% in the previous session. This week, Brent has seen a 2.7% increase, while WTI experienced a 1.1% gain. Traders are adjusting their pricing due to fading expectations for swift mediation by U.S. President Donald Trump to resolve the ongoing Russia-Ukraine conflict.

Analysts at ING noted in a client report, “It’s proving difficult to set up a Putin-Zelenskiy summit, while discussions around potential security guarantees face obstacles.” They added that “the less likely a ceasefire looks, the more likely the risk of tougher (U.S.) sanctions” against Russia.

Continued conflict saw Russia launch attacks near Ukraine’s border with the EU, while Ukraine claimed to have struck a Russian oil refinery. Following talks over the weekend between U.S. and Russian leaders, President Vladimir Putin has demanded that Ukraine relinquish certain territories and renounce NATO affiliations.

Trump has voiced a commitment to uphold Ukraine’s interests in any war-ending agreement, while Ukrainian President Volodymyr Zelenskiy dismissed the suggestion of withdrawing from internationally recognized Ukrainian territories.

Supporting oil prices further, the U.S. Energy Information Administration reported a larger-than-expected drawdown from U.S. crude inventories, indicating robust demand. Crude stockpiles dropped by 6 million barrels for the week ending August 15, surpassing analysts’ expectations of a 1.8 million barrel decrease.

Phil Flynn, a senior market analyst at the Price Futures Group, commented, “Oil prices are on the rise, supported by incredibly strong inventory numbers and continuing uncertainty about the prospects for peace between Russia and Ukraine.”

Investors are looking ahead to the Jackson Hole economic conference in Wyoming, where Federal Reserve Chair Jerome Powell is set to speak. Expectations of a potential interest rate cut could further stimulate economic growth and increase oil demand.

The latest supply data from the U.S. indicates that despite the recent volatility, there remains a tight market, with Brent crude expected to fluctuate between $60-70 per barrel for the foreseeable future. Giovanni Staunovo, a strategist at UBS, noted a possible decline towards the lower end of that range by year’s end.