Oil Edges Higher on Fresh Ukraine Strikes, Stalled Peace Talks, but Gains Capped by Weak Fundamentals

Oil prices firmed on Thursday as renewed Ukrainian attacks on Russian energy infrastructure raised concerns over potential supply disruptions, while stalled peace talks reduced expectations of a deal that could restore Russian crude flows to global markets. Still, soft fundamentals and persistent oversupply kept gains limited.

Brent crude rose 24 cents (0.38%) to $62.91, while WTI gained 29 cents (0.49%) to $59.24 by 0349 GMT.

Ukraine struck the Druzhba pipeline in Russia’s Tambov region—the fifth such attack on the line supplying Hungary and Slovakia—though operators later confirmed flows continued normally.

According to consultancy Kpler, Ukraine’s drone campaign against Russian refining infrastructure has become “more sustained and strategically coordinated,” with repeated strikes aimed at preventing refineries from stabilising operations. As a result, Russia’s refining throughput fell to around 5 million bpd between September and November, a 335,000 bpd year-on-year decline, with gasoline output hit hardest.

Sentiment was also supported by signs of stalling Ukraine peace negotiations, after U.S. President Donald Trump’s representatives reported no concrete progress in recent talks with the Kremlin. Expectations of a potential peace deal had previously weighed on prices amid assumptions that sanctions relief could bring more Russian oil into an already oversupplied market.

However, broader market fundamentals remain weak. Fitch Ratings cut its 2025–2027 oil price assumptions on Thursday, citing persistent oversupply and production growth expected to outpace demand.