Oil prices saw a slight increase on Monday, rebounding from significant declines last week. Brent crude futures rose by 0.5% to $77.69 a barrel, while U.S. West Texas Intermediate (WTI) futures climbed by 0.4% to $72.53 a barrel.
The previous week had seen both benchmarks experiencing a downturn of about 7%. The decline was attributed to stronger-than-expected U.S. jobs data, signaling potential delays in interest rate cuts, as well as progress in ceasefire negotiations between Israel and Hamas.
Investors remained cautious amid ongoing geopolitical tensions, particularly in the Middle East. Washington’s pledge to launch further strikes on Iran-backed groups in the region following a deadly attack on U.S. troops in Jordan added to the uncertainty. Additionally, Ukrainian drones struck Russia’s largest oil refinery, impacting the country’s oil exports.
While the ceasefire talks between Israel and Hamas could potentially ease tensions in the region, ongoing conflicts and U.S. military actions continue to pose supply disruption risks. However, analysts believe that these factors are likely to keep Brent futures below $80 a barrel.
Furthermore, the U.S. Department of Justice announced sanctions-evasion charges linked to an oil trafficking network financing Iran’s Islamic Revolutionary Guard Corps. The seizure of sanctioned Iranian oil aboard a crude tanker en route to China further added to geopolitical complexities.
In Russia, Ukrainian drones targeted the Volgograd oil refinery, although the facility continued to operate normally according to Lukoil, its owner. Meanwhile, BP’s oil refinery in Whiting, Indiana, experienced a power outage, with no confirmed date for restarting operations.