Oil prices increased on Wednesday following reports of Ukraine's attack on a Russian oil station and concerns that cold weather in the US could disrupt production, while trade tariff concerns and uncertainty over US monetary policy continue to impact prices.
International benchmark Brent crude traded at $75.95 per barrel at 10.31 a.m. local time (0731 GMT), up 0.6% from the closing price of $75.45 per barrel in the previous trading session.
American benchmark West Texas Intermediate (WTI) traded at $72.26 per barrel, a 0.7% rise from the previous session when it closed at $71.74 per barrel.
Russian Deputy Prime Minister Alexander Novak announced that Ukraine launched an unmanned aerial vehicle (UAV) attack on an oil pumping station belonging to the Caspian Pipeline Consortium (CPC), which transports Kazakhstan's oil, describing it as a 'reaction to the US.'
While briefing Russian President Vladimir Putin in Moscow, Novak stated that the station's capacity had dropped by 30-40% after the attack and warned that the repair process could take a long time.
CPC said that oil supplies from Kazakhstan could decrease by 30% for about 45 to 60 days, resulting in a loss of 300,000 barrels per day (bpd) in global markets.
Novak emphasized that the oil transported on the line belongs to international partners such as Chevron and ExxonMobil, as well as some European companies.
Novak stated that the attack was carried out in response to statements made at the Munich Security Conference, suggesting that Ukraine was likely reacting to the US' planned negotiations.
Adding to global supply concerns, cold weather conditions in the US threaten output in the world's biggest crude consumer.
The North Dakota Pipeline Authority estimates that production in the country's third largest oil-producing state could fall by up to 150,000 bpd.
Meanwhile, global oil markets experience volatility amid concerns that US President Donald Trump's plans to increase import tariffs could deepen trade wars.
Trump announced on Tuesday that he plans to impose a 25% tariff on automobiles and introduce similar tariffs on semiconductors and pharmaceutical imports.
These tariffs could increase the prices of consumer products, weaken the economy and reduce demand for fuel.
In addition, market players will closely monitor the minutes of the US Federal Reserve's (Fed) monetary policy meeting. Experts state that the Fed is expected to follow a cautious monetary policy strategy.
On the other hand, the Trump administration announced an agreement with Russia to hold additional talks to end the war in Ukraine.
Experts state that this agreement may help ease the sanctions that disrupt the flow of Russian oil shipments, potentially leading to a reduction in oil prices.
By Humeyra Ayaz
Anadolu Agency
energy@aa.com.tr