Oil heads for biggest weekly gain in three months as Russia cuts fuel exports
Oil prices rose during trading on Friday, September 26, 2025, heading to record the largest weekly gains since early last June, jumping by more than 4%, supported by intertwined geopolitical factors, most notably the Ukrainian attacks on Russian energy infrastructure and subsequent decisions to restrict exports.
Weekly gains and spot prices
The two benchmarks recorded strong performances throughout the week, achieving a rise above the 4% barrier, and the two crude touched their highest levels since the first of August during weekly trading, driven by a sudden drop in US stocks and attacks in Ukraine.
The main reasons for the ascent
The reason for such a strong rise is due to a combination of interrelated factors that narrowed the available supply in the market:
- Ukrainian strikes on Russian infrastructure: constant attacks with marching rectangles targeted refineries and oil facilities in Russia, reducing the country's refining capacity.
- Russian measures to restrict exports: in response, Russian Deputy Prime Minister Alexander Novak announced a partial ban on diesel exports until the end of the year, while extending the current ban on gasoline exports.
This prompted Moscow to come closer to reducing the production of crude oil itself to meet domestic needs first.
- NATO warnings: tensions increased after the Alliance warned Russia of its readiness to respond to any future violations of its airspace, raising geopolitical concerns and raising the specter of additional sanctions on the Russian energy sector.
The trap of geopolitical tensions
The escalating tensions between Russia and NATO are an additional factor that puts pressure on prices by increasing what is known as supply risks.
These tensions have escalated following US calls, including President Trump's pressure on allies such as Turkey to stop buying Russian oil, in an attempt to deprive Moscow of energy revenues.
These factors combined have created an environment of uncertainty driving investors to price a higher risk premium in oil prices.
Stressors to contain gains
Despite the strong weekly performance, there are factors that have worked to rein in gains and prevent prices from rising more sharply:
- Strong US economic data: data from the US Bureau of economic analysis showed that GDP grew at an annualized rate of 3.8% in the previous quarter.
This force makes the Fed (the US central bank) more cautious about lowering interest rates in the future, which may slow down economic activity and affect energy demand.
- Resumption of oil exports of Iraqi Kurdistan: the regional government announced the resumption of oil exports within 48 hours, which may return up to 500 thousand barrels per day to the world market, recalling the fears of oversupply that had previously pressured prices.
