Port Attacked! Crude Oil Jumps 2% Intraday!

On November 14th, Ukraine launched a new round of attacks on Russia, with the city of Novorossiysk experiencing a drone strike that damaged coastal buildings. Additionally, the Sheskharis oil export terminal near the Novorossiysk port was attacked, resulting in an explosion and fire. Sheskharis is a large oil export terminal located near the Novorossiysk port and serves as the endpoint of the oil pipeline operated by Russian oil transport company Transneft. According to foreign media reports, Ukraine used cruise missiles and drones in this attack.

As of 10:30 AM Beijing time on the 14th, WTI spot contracts rose by $1.44 to $60.13 per barrel, an increase of 2.45%. Brent spot contracts rose by $1.37 to $64.38 per barrel, an increase of 2.17%.

The attack is noteworthy and has significantly boosted oil prices in a short period because Novorossiysk is a crucial hub for Russian oil exports, primarily responsible for exporting and transporting crude oil and petroleum products from southern Russia. The damage caused by the attack may lead to the port ceasing operations, thereby impacting the global oil market. According to the previous Russian plan, oil exports from Novorossiysk are set to increase further after entering November. According to foreign media reports, starting in November, Lukoil will stop shipments to the Baku Port and reroute cargo to the Makhachkala Port, then transport it via pipeline to Novorossiysk for export by tanker.

Just a few days before this attack, Ukraine launched a remote attack on the oil terminal in Tuapse. Subsequently, the Russian railway operator suspended train services to Tuapse port due to insufficient capacity to handle freight volumes. According to foreign media reports, the port remains closed, awaiting repairs.

Within just one week, Russia's top two major oil export ports were attacked by Ukraine, coupled with the U.S. tightening sanctions against Russia, leading to a further tightening of Russian crude oil supply. The tension in the Russia-Ukraine geopolitical situation and the increased uncertainty in Russian oil exports are expected to continue to support oil prices.