Oil News: Supply Fears Grow as Ukraine Strikes Knock Out Russian Fuel Infrastructure

Geopolitical Tensions Boost Oil Prices Despite Friday Pullback

Crude oil futures retreated from early-session highs on Friday but remained on track for a weekly gain of over 4%, fueled by escalating geopolitical risks and persistent supply constraints.

Light crude briefly touched its highest level since early September before easing, with prices now testing the $65.06 pivot. A sustained break above this level could open the path toward the $65.68 – $65.83 resistance zone, potentially triggering upside momentum toward the $68.35–$69.34 target area.

Support remains firm at the long-term pivot of $64.21, with additional backing from the 50-day moving average at $63.72 and the 200-day at $63.07. Traders are closely watching whether bulls can maintain control into next week’s sessions.

At 09:58 GMT, Light Crude Oil Futures are trading $64.87, down $0.11 or -0.17%.

Ukraine Strikes and Russian Export Bans Tighten Global Fuel Supply

Markets responded sharply to Ukraine’s continued drone strikes on Russian oil infrastructure, which prompted Moscow to extend its gasoline export ban and introduce a new diesel export ban through year-end, according to Reuters’ Ron Bousso. Russia’s Deputy PM Alexander Novak confirmed the bans, signaling a supply cut that impacts roughly 12% of global diesel exports.

The ripple effect was immediate: European diesel refining margins spiked 8% to February highs, while U.S. distillate stocks remain 11% below their 10-year average. With diesel inventories already tight and refiners struggling to meet demand, these developments have amplified concerns over global fuel availability heading into Q4.

OPEC+ Falls Short of Supply Hike Targets, Sparking Tightness Concerns

Reuters reported that OPEC+ underdelivered on its production hike goals between April and August, falling 500,000 bpd short of its 1.92 million bpd target. The shortfall—equal to 0.5% of global oil demand—has prevented a price correction, supporting Brent near the $69 mark and sustaining backwardation in the futures curve.

Capacity constraints, rather than strategy, are largely to blame. Many producers, including Kazakhstan, Algeria, and Oman, are operating near capacity. With only Saudi Arabia and the UAE holding meaningful spare production, the group’s ability to boost output in October appears limited. RBC and Kpler analysts expect real output gains to be just half of planned increases.

Fed Rate Cut Hopes Dented by Strong U.S. GDP Read

Some bullish momentum was tempered by a hotter-than-expected U.S. GDP revision to 3.8%, raising doubts over further Federal Reserve rate cuts. Though the Fed delivered a 25 bps cut last week, the strength in economic data could delay additional easing, which in turn could pressure crude through dollar strength.

Oil Price Forecast: Bullish Bias Supported by Supply Disruptions and Tight Spare Capacity

The confluence of tightening OPEC+ output, Russia’s export restrictions, and heightened geopolitical risk reinforces a bullish oil prices forecast heading into the final week of the month.

Unless key resistance near $65.83 breaks decisively, short-term consolidation is possible—but the broader supply picture remains supportive for continued strength in crude.

More Information in our Economic Calendar.