On Friday, oil prices experienced an increase due to Ukraine’s drone strikes targeting Russia’s energy infrastructure, which resulted in a reduction of the country’s fuel exports. Brent futures concluded trading at $70.13 per barrel, reflecting an increase of 71 cents, or 1.02%. U.S. West Texas Intermediate crude concluded trading at $65.72 per barrel, reflecting an increase of 74 cents, or 1.14%.

Both benchmarks are poised to record their largest gains since mid-June. “Markets remained attentive to the developments concerning Russia and Ukraine,” stated John Kilduff. “The cumulative effect of these drone attacks by Ukraine is becoming increasingly significant.” Russia is set to implement a partial ban on diesel exports through the end of the year while also prolonging the current ban on gasoline exports, as stated by Deputy Prime Minister Alexander Novak on Thursday. The decline in refining capacity has resulted in various Russian regions experiencing shortages of specific fuel grades.

Alongside the drone attacks, Andrew Lipow, indicated that actions taken by the U.S. government were also beneficial. “President Trump continues to pressure U.S. allies to reduce Russian imports,” Lipow stated. “It is plausible that India and Turkey will decrease certain imports from Russia.” NATO’s warning of a response to further violations of member nations’ airspace has heightened tensions stemming from the war in Ukraine and increased the likelihood of further sanctions on Russia’s oil sector, according to analyst Daniel Hynes. Crude oil exports from Iraq’s semi-autonomous Kurdistan region are set to recommence on Saturday. This information comes from state marketer SOMO, which will facilitate the transportation of oil through pipeline to Turkey’s Ceyhan port. “The market will be observing Kurdish production to assess its contribution to supply,” Lipow stated. The latest estimate from the Commerce Department’s Bureau of Economic Analysis indicates that U.S. gross domestic product experienced an upwardly revised annualized growth rate of 3.8% in the past quarter.

“If Russia’s supply to China and India is altered, they will seek alternative sources,” Again Capital’s Kilduff stated. “U.S. economic data has been satisfactory.” With the Federal Reserve easing interest rates, this will contribute to demand. However, stronger-than-expected economic data could lead the U.S. Federal Reserve to exercise greater caution regarding further interest rate cuts following a 25 basis point reduction last week, marking its first adjustment since December.