West Texas Intermediate (WTI) crude extended its rally for the fourth straight session on Friday, hovering around $65.10 per barrel during Asian trading. Prices touched a near three-week high as supply concerns deepened, fueled by escalating pressure on Russian oil linked to the ongoing Ukraine conflict.
US President Donald Trump urged Turkish President Recep Tayyip Erdogan to halt purchases of Russian crude, part of Washington’s broader effort to tighten sanctions on Moscow. Beginning October 1, the US will also impose penalties on Serbia’s Russian-owned oil company NIS, which operates the country’s sole refinery. The US Treasury’s Office of Foreign Assets Control had initially sanctioned Russia’s oil sector in January, giving Gazprom Neft 45 days to divest its stake in NIS.
According to Reuters, XtremeMarkets analyst Tony Sycamore noted that gains were supported by “ongoing Ukrainian drone strikes targeting Russian oil infrastructure, NATO’s warning to Russia over future airspace violations, and Russia’s move to halt key fuel exports.”
A drop in refining capacity has brought Russia close to reducing crude production, with several regions already facing shortages of certain fuel grades. On Thursday, Russian Deputy Prime Minister Alexander Novak announced a partial ban on diesel exports through year-end, alongside an extension of the current gasoline export ban.
Despite the bullish drivers, crude’s upside may be capped by uncertainty surrounding Federal Reserve (Fed) policy. Chicago Fed President Austan Goolsbee reiterated his reluctance to pursue additional policy easing while inflation remains above target. Meanwhile, newly appointed Fed Governor Stephen Miran argued for a more aggressive 50-basis-point cut to shield the labor market from further strain.
