Oil prices saw modest gains as tensions between Russia and Ukraine escalated, with Russia firing a ballistic missile at Ukraine and warning of a broadening conflict. This sparked concerns about the tightening of crude supplies in an already volatile market.

Brent crude futures rose by 14 cents, or 0.2%, to $74.37 per barrel at 0007 GMT, while U.S. West Texas Intermediate (WTI) crude futures gained 17 cents, or 0.2%, reaching $70.27 per barrel.

Russian President Vladimir Putin stated that the war in Ukraine was expanding into a global conflict, particularly after the U.S. and Britain permitted Ukraine to launch strikes on Russian territory using Western-supplied weapons. Putin confirmed that Russia had retaliated by firing a hypersonic medium-range ballistic missile at a Ukrainian military facility, signaling potential further escalation.

Rising Geopolitical Tensions Putin’s comments followed recent strikes by Ukraine on Russian military infrastructure, which included U.S.-made ATACMS missiles on November 19 and British Storm Shadow missiles, as well as U.S.-supplied HIMARS rockets on November 21. These developments raised alarms over the potential disruption to global oil supply, especially given Russia’s central role in the global energy market.

Despite facing import bans and supply cuts from OPEC+ in response to its invasion of Ukraine, Russia continues to produce significant oil volumes, reportedly around 9 million barrels per day.

Impact on Oil Infrastructure Ukraine has increasingly targeted Russian oil infrastructure, including a major drone strike on Russian refineries in June. These actions add to market concerns about the security of oil supplies, particularly as geopolitical risks heighten.

U.S. Stocks and Inventory Concerns In contrast to the rising geopolitical tensions, swelling U.S. crude and gasoline stocks helped limit price increases. The latest government data showed U.S. crude stocks rose by 545,000 barrels to 430.3 million barrels in the week to November 15, while gasoline inventories increased by 2.1 million barrels to 208.9 million barrels. Analysts predict further inventory growth in next week's data, which could weigh on prices.

Jim Ritterbusch, president of Ritterbusch and Associates, noted that U.S. crude production and refinery activity are expected to rebound, which could have negative implications for both crude and refined product prices in the near term.

China’s Policy Measures and Energy Imports On the global stage, China, the world’s top crude oil importer, announced new measures to boost trade, including support for energy product imports. This move came amid growing concerns over U.S. President-elect Donald Trump’s potential tariffs, which could impact global trade flows and energy markets.

As the conflict in Ukraine intensifies and global supply concerns persist, oil prices remain susceptible to further volatility, with both geopolitical and inventory data playing key roles in shaping market expectations.