September 1, 2025
Escalating clashes between Russia and Ukraine as well as heightened tensions with the Yemeni Houthi group ballistic missile attack on an Israeli vessel off the Red Sea coast have rallied demand concerns culminating on Monday in increased Crude oil prices in the global market.
Brent crude traded for $67.66 per barrel, up 0.4% from the previous close of $67.37 while US benchmark West Texas Intermediate, WTI, rose 0.6% to $64.11 from $63.73 in the prior session.
Meanwhile German Chancellor, Friedrich Merz, has said he sees little or no chances of a diplomatic breakthrough between Russia and Ukraine and warned that the conflict could drag longer than envisaged.
Merz, in an interview, reaffirmed that despite US President Donald Trump’s efforts to end the war, Russian President Vladimir Putin’s recent actions demonstrate his lack of interest in negotiations.
READ MORE; Oil Prices Increased Over Supply Concerns Following Attack On Russia Energy Infrastructure.
“I don’t see that happening on either side at the moment, either. So I am preparing myself mentally for the fact that this war could go on for a long time. We are trying to end it as quickly as possible. But certainly not at the price of Ukraine’s surrender.”
The Possibility of a prolonged conflict have intensified supply concerns, has added upward pressure on crude prices.
Twenty six EU member states on Friday, condemned Russia’s attacks on Ukrainian cities, including Kyiv and said they were expediting work on a 19th package of sanctions.
While believing that these measures would hit Russian oil producers and exporters is fueling concerns over global supply and supporting prices, bets on a Fed rate cut in September continued to underpin crude, with investors expecting a lower-rate environment to spur economic growth and boost crude oil demand.
However, gains were capped by demand worries linked to Trump’s tariff threats and expectations that eight OPEC+ members will increase production. Anticipation of higher output from OPEC+—including Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman—has raised concerns about potential oversupply ahead of Sunday’s meeting.
READ MORE; OPEC+ Hints On Raise In Oil Output By 547,000 bpd In September.
Despite US tariff hikes on Indian imports of Russian oil from 25% to 50%, effective August 27, experts still expect Russian exports to India to rise, keeping downward pressure on prices in check.
Military spokesman Yahya Saree in a statement on Monday said that the Yemeni Houthi group had launched a ballistic missile attack on an Israeli vessel off the Red Sea coast, the ballistic missile targeted Israeli oil tanker Scarlet Ray in the northern Red Sea.
He said the ship was directly hit by the Houthi missile. There was no immediate comment from the Israeli army on the Houthi claim, or information about damage or injuries.
The United Kingdom Maritime Trade Operations (UKMTO) reported a projectile attack earlier Monday on a Liberia-flagged, Israeli-owned tanker near Yanbu, Saudi Arabia.
READ MORE; Oil Prices Drop In Anticipation of US Federal Reserve Rates Decision
No injuries were reported, and the vessel continued its voyage, UKMTO said. Monday’s attack came days after Houthi Prime Minister Ahmed Ghalib Al-Rahawi and several ministers were killed in an Israeli strike on the Yemeni capital Sanaa on Thursday.
Following the attack, the Houthi group vowed to continue its missile and drone strikes against Israeli targets in support of Palestinians in the Gaza Strip.
