Crude oil prices rose sharply on Monday afternoon, gaining nearly 4% as geopolitical tensions escalated following a major Ukrainian drone attack on Russian military airports.
Overnight, Ukrainian drones struck four airports in Russia’s Kursk and Voronezh regions. The attacks caused fires in residential areas, disrupted highway traffic, and reportedly destroyed more than 40 aircraft. Russian officials said they intercepted 162 drones, with 57 shot down over Kursk alone. These strikes are part of Ukraine’s ongoing effort to pressure targets deep inside Russian territory.
By 12:47 p.m. ET on June 2, Brent crude traded up 3.78% at $65.15 per barrel, while West Texas Intermediate (WTI) rose 3.92% to $63.17 per barrel.
Earlier Monday, Goldman Sachs forecasted that OPEC+ would proceed with its final planned production increase of 411,000 barrels per day (bpd) in August. The firm said the expected slowdown in demand is unlikely to stop the group from raising output when it meets in early July.
This follows OPEC+’s announcement on Saturday to boost production by 411,000 bpd in July, continuing similar increases in May and June.Analysts at ING said the market is reacting to a mix of geopolitical instability and OPEC+’s cautious approach to supply growth, pushing prices higher.
ING also noted that while President Trump is reportedly frustrated with President Putin, he has so far resisted new sanctions targeting Russian oil. They warned that stronger actions against Russian oil flows could dramatically change the oil market outlook.
Morgan Stanley expects OPEC+ to continue with three more monthly output hikes, potentially adding 2.2 million bpd back to the market, excluding overproduction by some members who do not fully follow the agreement.
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