Oil Falls on Signs Russia’s Novorossiysk Port Resumes Operations

(Bloomberg) — Oil dropped following signs that activity had resumed at the key Russian port of Novorossiysk on the Black Sea, after a Ukrainian strike last week led to some damage and a suspension of operations.

Brent slipped below $64 a barrel after closing more than 2% higher on Friday following the attack, and West Texas Intermediate fell toward $59. Two tankers moored on Sunday at Novorossiysk, indicating operational activity at the terminals, while Reuters reported that crude loading had resumed.

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“People were expecting a longer outage” at Novorossiysk following the strike, said Mukesh Sahdev, the founder and chief executive officer of Xanalysts Pty. Indications of a resumption are a “bearish signal,” he added.

The attack on Novorossiysk, along with Iran’s seizure of an oil tanker near the Strait of Hormuz, injected fresh geopolitical premium into prices as the market faces pressure from an emerging global surplus. OPEC+ and producers from outside of the group are ramping up output, though China and India are providing some buying support due to US sanctions on Russia energy.

The US has ramped up its actions against Moscow in an effort to end the war in Ukraine, including blacklisting Rosneft PJSC and Lukoil PJSC. President Donald Trump told reporters on Sunday that he’d back proposed Senate legislation to sanction countries conducting business with Russia.

Meanwhile, refinery margins have surged as relentless attacks on Russia’s energy infrastructure, outages at key plants in Asia and Africa, and permanent closures across Europe and the US cut diesel and gasoline supply.

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