Brent Crude Rises Nearly 2% as Russia Supply Risks and U.S. Policy Uncertainty Loom

Oil prices climbed on Tuesday amid mounting concerns over Russian supply disruptions as the Ukraine conflict escalates, while markets await clarity on the impact of U.S. policies on major crude consumers.

Brent futures for November delivery rose 1.92% to $69.46 per barrel at 10:54 a.m. London time.

October Nymex WTI futures advanced 3.06% to $65.97 per barrel. Note that WTI did not settle on Monday due to the U.S. Labor Day holiday.

Escalating Conflict Threatens Russian Oil Output

According to Reuters estimates, Ukrainian drone strikes have shut down facilities accounting for around 17% of Russia’s refining capacity, though CNBC could not independently verify these figures.

Over the weekend, Ukrainian President Volodymyr Zelenskyy pledged “new deep strikes” against Russia in a social media post, without disclosing further details. His comments come as U.S. and European efforts to bring Kremlin leader Vladimir Putin to ceasefire talks remain stalled.

Washington Tightens Indirect Pressure on Russian Oil Buyers

The White House has imposed additional tariffs on Indian goods, criticizing New Delhi’s ongoing purchases of Russian crude. India condemned the measures as “unfair, unjustified, and unreasonable.”

Meanwhile, U.S. President Donald Trump doubled down on his criticism of trade ties with India, calling them “a totally one-sided disaster.”

So far, Washington has avoided direct action against China – the world’s largest oil importer and Russia’s biggest customer since G7 sanctions were introduced. At this week’s Shanghai Cooperation Organization (SCO) summit, Putin, Chinese President Xi Jinping, and Indian Prime Minister Narendra Modi met in a show of solidarity among Global South nations.

OPEC+ Meeting in Focus Amid Surplus Concerns

Investors are watching the September 7 meeting of an eight-member OPEC+ subgroup, including Russia, Saudi Arabia, the UAE, Iraq, and Algeria, for signals on future output policy.

Analysts at ING noted:

“We, like the broader market, expect the group to keep production levels unchanged for October. The surplus outlook into next year makes additional supply unlikely. The bigger risk is OPEC+ reinstating supply cuts to address concerns about oversupply.”

Fed Rate Cut Expectations Could Influence Oil Demand

Market participants are also eyeing this week’s U.S. August jobs report, a key input for the Federal Reserve’s September 16-17 policy meeting. The Fed is widely expected to cut interest rates, which could weaken the U.S. dollar and boost demand for dollar-denominated commodities such as crude oil.