Ukraine drone attacks shut down 17% of Russian oil production
September 3, 2025
The US Treasury Department on Tuesday sanctioned a network of shipping companies and vessels led by an Iraqi-Kittitian businessman for smuggling Iranian oil disguised as Iraqi oil.
According to President Claudia Sheinbaum’s government report, Pemex signed its first mixed contracts with private sector partners in a bid to reverse declining hydrocarbon production. The 11 deals, signed under a new contractual framework stemming from the latest energy sector reform, mark the initial phase of Pemex’s plan to close 21 such agreements this year. The company expects to the initiative to add up to 450,000 bpd of crude oil production by 2033. The first 11 deals ae expected to add around 70,000 bpd of oil and 610 million cubic feet per day of natural gas.
OPEC+ meets on Sunday, and the group will consider another round of supply increases. Some are speculating that with the producers struggling to produce more barrels now that OPEC+ may put a halt to additional barrels. The market has been of the opinion that more barrels were coming for some time now so this change could support prices in the near term and could be part of the recent strength in prices.
Energy prices were supported by Russia and Ukraine exchanging some drone attacks. The Ukraine drone attacks are reported to have shut down roughly 17% of Russia oil processing capacity or 1.1 million bpd. Despite their recent drone attacks I have also heard some rumblings about a behind the scenes ceasefire deal. A lot of questions and uncertainties keep these markets volatile and stuck in their ranges. The bulls have had the upper hand in the last few days and have rallied prices. Prices are approaching resistance level that should stop the advance but if they do not then a medium term run higher is possible. Any news of a cease fire will see energy price sell off.
The expected cut to interest rates by the Fed at this month’s meeting is also offering support to prices. Current sentiment seems to be leaning bullish but if prices cannot take out resistance the markets will pull back and continue to trade in its ranges.