Oil prices hold above Sh14,161 as fresh Russia-Ukraine attacks deepen supply fears

Oil prices hold above Sh14,161 as fresh Russia-Ukraine attacks deepen supply fears

With fighting continuing in both Eastern Europe and the Middle East, experts argue that the balance between recovering supplies and fresh disruptions is likely to remain a key driver of oil prices in the near term.

Benchmark oil prices remained above $109 (Sh14,161) per barrel on Tuesday as renewed attacks on energy infrastructure in Russia and Ukraine compounded supply concerns linked to the escalating US-Iran conflict.

Brent crude steadied above the $109 mark as investors weighed the risk of further disruptions against signs of recovering oil shipments from the Persian Gulf.

The latest attacks on Ukrainian energy facilities, which Kyiv said knocked out power for about 550,000 families, have added another layer of uncertainty to an already volatile oil market.

Ukrainian officials said Russia launched at least 16 ballistic missiles at the capital region and about 200 drones against targets across the country, damaging more than 10 energy infrastructure facilities.

“Energy facilities were the main target, but a clinic, a school, a metro station and homes were also hit," the Ukrainian Ministry of Defence said.

The strikes followed Ukrainian attacks over the weekend on Russian energy and oil infrastructure, including a major oil terminal in St Petersburg, highlighting the growing threat to energy assets on both sides of the war.

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The renewed fighting comes as tensions in the Middle East continue to threaten crude flows through the Strait of Hormuz, a critical shipping route for global oil supplies.

Iran has reportedly continued to assert control over the waterway, while maritime authorities have reported attacks on commercial vessels.

Saudi Arabia and Iran-backed Houthi militants in Yemen have also exchanged strikes, further raising concerns about the security of regional energy infrastructure and shipping routes.

However, signs of recovering supply have offered some relief to markets.

US Energy Secretary Chris Wright said Persian Gulf oil shipments had rebounded to about 80 per cent of pre-war levels, although deliveries of refined petroleum products remained limited.

The Trump administration has also authorised the sale of sanctioned oil tankers to allow them to transport crude legally, potentially easing shipping bottlenecks.

The global fleet of vessels used to transport sanctioned oil is estimated at about 1,600.

Despite these measures, traders remain alert to the possibility that further attacks could disrupt production, exports or shipping, keeping prices elevated.

For oil-importing economies such as Kenya, sustained increases in crude prices could raise the cost of fuel imports and put additional pressure on foreign exchange demand.

Higher international prices can also feed into domestic pump prices, transport costs and the prices of goods and services.

With fighting continuing in both Eastern Europe and the Middle East, experts argue that the balance between recovering supplies and fresh disruptions is likely to remain a key driver of oil prices in the near term.