Oil prices rose on Monday following Ukraine’s intensified attacks on Russia, raising fears of disruptions to Russian oil supplies, while expectations of US interest rate cuts boosted global growth and fuel demand forecasts. Brent crude futures increased by 13 cents, or 0.19%, to $67.86, and West Texas Intermediate futures rose 15 cents, or 0.24%, to $63.81. Russian officials reported a Ukrainian drone attack on a major Russian nuclear power plant and a large fire at the Ost-Luga fuel export terminal. Additionally, a fire at the Novoshakhtinsk refinery, caused by a Ukrainian drone attack, remained active for the fourth day. The refinery mainly exports fuel with an annual capacity of 5 million metric tons, about 100,000 barrels per day. Market analyst Tony Sycamore noted that Ukraine’s success in targeting Russian oil infrastructure increases crude oil risks. Meanwhile, US Vice President J.D.

Vance stated that Russia has made significant concessions towards a negotiated settlement in the war with Ukraine, acknowledging security guarantees for Ukraine’s territorial integrity. However, former US President Donald Trump renewed threats of sanctions on Russia if no peaceful settlement is reached within two weeks. Despite hints from the Federal Reserve about a possible rate cut in September improving risk appetite, oil prices lack momentum. Market analysts highlight that Trump’s tariffs could harm economic growth, keeping oil prices controlled. Commodity investors’ risk appetite is supported by renewed supply-side issues in energy and metals sectors. After strong weekly gains, Brent crude futures rose about 3% last week, with WTI also gaining. Traders assess geopolitical developments for oil supply forecasts. Trump proposed a trilateral summit including Ukraine and Russia to facilitate peace talks, welcomed by Ukrainian President Volodymyr Zelensky. Uncertainty remains about Russian President Putin’s willingness for resolution.

Potential ceasefire raises concerns about global oil supply surplus, especially if US sanctions on Russian oil ease after a peace deal. Oil prices remain supported amid fading optimism for a ceasefire. In trade developments, the US plans to impose an additional 25% punitive tariff on Indian goods from August 27, raising total tariffs to 50%, responding to India’s increased purchases of Russian oil. Indian officials expressed displeasure, emphasizing defending national interests. Some Indian oil processors intend to continue buying Russian crude, indicating sustained demand supporting global oil prices. Federal Reserve Chair Jerome Powell’s remarks at Jackson Hole last week influenced market expectations, signaling a possible rate cut in September due to rising labor market risks. Traders now price an 87% chance of a quarter-point rate cut at the next meeting. Lower interest rates reduce borrowing costs, encouraging investment and spending that can increase energy consumption.

In energy markets, South African petrochemical company Sasol reported annual profits due to higher chemical prices, tighter cost controls, and reduced asset write-downs. Sasol posted a basic earnings per share of 10.60 rand ($0.607) for the fiscal year ending June 30, compared to a loss of 69.94 rand per share last year. The company benefited from a 4.3 billion rand compensation from Transnet after a lawsuit alleging overpricing of oil transport. Sasol’s sales fell 9%, mainly due to lower volumes, weaker rand oil prices, and refining margins. However, it kept fixed cash cost increases below inflation and cut capital expenditure by 16% to 25.4 billion rand. Sasol’s asset losses dropped significantly to 20.7 billion rand from 74.9 billion rand the previous year. Losses related to liquid fuel refineries Secunda and Sasolburg, gas production sharing agreements, Mozambique exploration, and Italian chemicals business. Most prior losses were linked to US chemical operations affected by lower prices and weak demand.

Sasol suspended dividend payments again as net debt of $3.7 billion remains above the $3 billion cap per dividend policy. In Nigeria, Nigeria LNG Limited signed 20-year gas supply contracts with Nigerian National Petroleum Corporation and other oil companies to supply 1.29 billion standard cubic feet per day supporting liquefaction plants and expansion plans. Volumes will increase gradually to supply the $10 billion Train-7 gas plant on Bonny Island, 80% complete. NNPC Group CEO Bayuo Ogulari said contracts create growth, cooperation, and shared prosperity opportunities. Nigerian LNG Managing Director Philip Mshelbila said deals address ongoing gas supply issues from pipeline disruptions and sabotage, reflecting strategy to diversify feed gas sources after many global oil companies sold onshore assets. Nigerian LNG is jointly owned by NNPC (49%), Shell Gas (25.6%), TotalEnergies (15%), and Eni (10.4%).

In Russia, seaborne exports of oil products fell 6.6% in July from June to 8.67 million metric tons amid planned refinery maintenance and strong domestic demand, according to industry sources. Russia’s unused primary oil refining capacity rose in July to the highest since the start of the year at 4.13 million tons, up 26% from 3.28 million tons in June, indicating lower fuel production and exports. Total oil product exports through Baltic ports Primorsk, Vysotsk, St. Petersburg, and Ust-Luga dropped 5.4% month-on-month to 4.74 million tons. Fuel exports via Black Sea and Azov ports declined 10.5% to 3.27 million tons. Exports from Murmansk and Arkhangelsk ports in the Arctic fell 41.8% to 39,700 tons from 65,900 tons. Fuel exports at Russian Far East ports rose 15.3% month-on-month in July to 611,000 tons after local refineries completed seasonal maintenance.