Crude oil benchmarks have edged higher today, Monday September 15, 2025, as traders weigh the fallout from Ukrainian drone attacks on key Russian energy sites against expectations for a U.S. Federal Reserve interest rate reduction that could bolster global demand.

Brent crude futures settled at $67.33 per barrel, up 34 cents from the previous session, while West Texas Intermediate (WTI) rose 9 cents to $62.78. The modest gains followed weekly increases of over 1 percent for both contracts, driven by Kyiv's recent escalations against Moscow's oil infrastructure. Ukrainian forces confirmed strikes on the Primorsk export terminal – Russia's largest, handling about 1 million barrels per day – and the Kirishinefteorgsintez refinery in the Leningrad region, which processes roughly 355,000 barrels daily and accounts for 6.4 percent of national capacity. Russian officials reported intercepting dozens of drones but acknowledged fires at the sites, with no injuries noted. Despite the disruptions, a Bashkortostan-based oil firm stated it would sustain production levels after a separate attack, highlighting ongoing resilience in Russia's energy sector.

These incidents are part of a broader pattern, with Ukraine targeting Russian facilities to curb war funding. Strikes in recent weeks have affected up to 17 percent of Russia's refining capacity, contributing to domestic fuel shortages and prompting export pauses. Russia, the world's second-largest oil exporter, has seen gasoline bans until late September to manage seasonal demand spikes.

Adding to the mix, U.S. President Donald Trump reiterated calls for NATO allies to halt Russian oil imports before Washington imposes further sanctions. In a weekend statement, Trump said the U.S. stands ready for "major sanctions" on Moscow but only if European nations align by ceasing purchases that "weaken" negotiations.

Europe has slashed Russian oil imports by 90 percent since 2022 via seaborne bans and price caps, though pipeline flows to Hungary and Slovakia persist, totaling about $1.72 billion in the first quarter of 2025 – down sharply from $16.4 billion in early 2021. The EU is advancing its 19th sanctions package, potentially accelerating a full phase-out of Russian fossil fuels by 2028, including bans on LNG terminals and shadow fleet vessels. Discussions in Washington this week emphasized coordinated action, with EU officials eyeing restrictions on Russian banks and oil traders.

Parallel U.S.-China trade talks in Madrid, which began Sunday, are also influencing sentiment. Led by Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer for the U.S., and Vice Premier He Lifeng for China, the negotiations cover tariffs, TikTok divestiture deadlines, and Beijing's Russian oil buys. Amid a 15 percent drop in U.S.-China exports this year, the talks aim to extend a fragile truce, though experts anticipate only minor progress, such as delaying TikTok's September 17 U.S. sale deadline.

On the economic front, softer U.S. jobs data – with 263,000 initial claims last week, the highest in four years – has heightened focus on the Fed's September 16-17 meeting. A quarter-point cut is nearly certain, the first of 2025, as Chair Jerome Powell signals easing to counter labor market cooling while monitoring inflation. Markets price in two to three cuts by year-end, potentially supporting oil demand in the top-consuming nation.

Balancing these risks, the International Energy Agency (IEA) forecasted steady global oil demand growth of 700,000 barrels per day for 2025, reaching 104.4 million barrels per day, fueled by industrial recovery in major economies and easing Asian restrictions. Refinery runs are expected at 83.5 million barrels per day, with Asian diesel and gasoline prices firming as inventories dip. OPEC+ members, including Saudi Arabia, reaffirmed voluntary cuts under their agreement to stabilize prices amid uncertainties, though the group began unwinding a 1.65 million barrel-per-day tranche in April, with gradual increases through 2026. Saudi output quotas rose to 9.98 million barrels per day in September, maintaining substantial spare capacity.