Oil Prices Firm Amid Ukraine Strikes and Geopolitical Tensions

December 4, 2025 – New Delhi – Oil prices edged higher on Thursday following Ukrainian attacks on Russia’s oil infrastructure, signaling potential supply disruptions, while stalled peace talks limited expectations of a near-term resolution.

Brent crude rose 41 cents (0.65%) to $63.08 per barrel, while U.S. West Texas Intermediate (WTI) climbed 45 cents (0.76%) to $59.40 per barrel as markets reacted to geopolitical developments and production constraints.

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Ukrainian Attacks on Russian Oil Infrastructure

Ukraine’s military targeted the Druzhba oil pipeline in Russia’s Tambov region, marking the fifth attack on the pipeline that supplies Russian crude to Hungary and Slovakia. Despite the strikes, the pipeline operator confirmed that flows continued as normal.

Consultancy Kpler noted that Ukraine’s drone campaign has become strategically coordinated, targeting Russian refineries in repeated cycles to prevent key assets from stabilizing.

“This campaign has reduced Russian refining throughput to around 5 million barrels per day between September and November, a 335,000 bpd year-on-year decline, with gasoline and gasoil production hit hardest,” Kpler said in a report.

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Impact of Stalled Peace Talks

Expectations for an end to the Ukraine conflict had previously pressured oil prices, as traders anticipated that sanctions on Russian oil could be lifted, allowing additional supply into an already oversupplied global market.

However, peace talks led by U.S. President Donald Trump’s representatives concluded without significant breakthroughs, further supporting crude prices.

“Crude will likely remain stuck in a narrow range while the Ukraine peace efforts grind on,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.

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Black Sea Drone Attacks and Supply Concerns

In addition to pipeline strikes, Ukrainian naval drones targeted two sanctioned tankers in the Black Sea bound for Russian ports. These tankers were set to load crude oil for foreign markets, raising further concerns about supply disruptions.

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Market Fundamentals Keep Gains Limited

Despite the geopolitical support, underlying market fundamentals remain weak. Fitch Ratings recently revised its 2025-2027 oil price assumptions downward, citing an oversupplied market and global production growth outpacing demand.

Traders are closely watching Russian refinery operations, pipeline flows, and international diplomatic efforts, which will continue to influence Brent and WTI crude prices in the near term.

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Conclusion

Oil markets reacted to Ukraine’s strategic strikes on Russian infrastructure and stalled peace talks by posting modest gains, but structural oversupply and growing production continue to limit upside potential. Analysts suggest that prices may remain in a narrow trading range unless a significant geopolitical or supply shock occurs.