Oil is rising today, so what are the reasons

Global oil markets are in a state of anticipation and excitement, as crude prices rose near the levels of USD 63 per barrel for WTI, supported by supply concerns from Russia due to escalating Ukrainian attacks on energy infrastructure, along with anticipation of a possible decision to cut interest rates from the US Federal Reserve.

Ukrainian attacks disrupt Russian supplies

Ukraine has intensified its attacks on Russian energy infrastructure in an attempt to weaken Moscow's war capabilities, with recent attacks targeting Russia's Kirishi refinery, shutting down a key processing unit.

The attacks also included the Primorsk oil terminal, one of Russia's largest export terminals on the Baltic Sea.

Analysts noted J.P.Morgan pointed out that these attacks are aimed at limiting Russia's ability to sell oil abroad, which affects global export markets and pushes prices up.

Impact of attacks on production and refining capacity

Goldman Sachs estimates that the Ukrainian attacks stopped about 300 thousand barrels per day of Russian refining capacity during August and this month.

Analysts warned that if these attacks continue and refining capacity is disrupted, Russian producers may be forced to reduce crude oil production, especially if storage facilities or export routes reach their maximum capacity.

Russia, which accounts for more than 10% of global oil production, is a major source of concern for global oil markets in the event of supply disruptions.

Western pressure on Russian oil buyers

As part of the mounting pressure on Russia, the European Union is considering imposing sanctions on companies in India and China that facilitate the trade of Russian oil, as part of a new package of restrictions.

In this context, US Treasury Secretary Scott Besant stated that the US administration will not impose additional tariffs on Chinese goods to stop its purchases of Russian oil, unless the European Union imposes exorbitant tariffs on China and India.

Expectations of US interest rate cuts and support for demand

Market participants are heading for an expected cut in interest rates from the US Federal Reserve this week, as the central bank is widely expected to cut rates by at least a quarter of a percentage point.

Lower borrowing costs could boost demand for fuel, supporting prices.

The weakening of the US dollar, supported by expectations of an interest rate cut, also lowers the cost of oil for holders of other currencies, which also supports prices.