Oil climbed 2 percent on Thursday as tensions between Russia and Ukraine continued to heighten as the countries launched missiles at each other, worrying markets about crude supply.
Brent crude futures rose $1.42, or 1.95 percent to $74.23 per barrel while the US West Texas Intermediate (WTI) crude futures increased $1.35 or 2 percent to $70.10.
Russian President Vladimir Putin said on Thursday that Russia had launched a hypersonic medium-range ballistic missile attack on a Ukrainian military facility, spiking fresh worries.
He warned the West that Russia, which is the world’s second-largest crude exporter, could strike the military installations of any country whose weapons were used against it.
This came after Ukraine fired US and British missiles at targets inside Russia this week despite warnings that it would see such action as a major escalation.
President Putin also said the West was escalating the conflict in Ukraine by allowing it to strike Russia with long-range missiles, and that the war was becoming a global conflict.
Market analysts warned that a Ukraine strike could potentially hit Russian energy infrastructure or trigger a Russian retaliation that could restrict oil production or exports.
Meanwhile, China, the world’s largest oil importer, on Thursday announced policy measures to boost trade, including support for energy product imports, amid worries over US President-elect Donald Trump’s threats to impose tariffs.
Meanwhile, the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) may push back output increases again when it meets on December 1 due to weak global oil demand.
The 22-member alliance which pumps around half the world’s oil had initially planned to gradually reverse production cuts from late 2024 and through 2025. This will possibly lend support to the market.
Iran, also a member of OPEC+, agreed to stop stockpiling uranium, turning the tension down in the Middle East region.
Signals of further slower interest rate cuts in the US continued to trail the global economy but this can slow economic activity and dampen oil demand.