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    Drone attacks could cause Russian oil producers to cut output, leading to higher oil prices.

    by VT Markets
    /
    Sep 16, 2025
    Reports suggest that Russia may soon decide to cut oil production due to drone attacks on its ports and refineries. These events have pushed oil prices up to a two-week high, with WTI crude oil rising by 73 cents to $64.03. Transneft, Russia’s main oil pipeline company, has alerted producers that they may need to reduce output because of these attacks. Transneft controls over 80% of Russia’s oil production and has recently limited the capacity for oil companies to store oil in its pipeline system.

    Impact of Potential Supply Shock

    WTI crude’s rise to $64.03 likely reflects worries about a potential supply shock from Russia. Transneft’s warnings about possible production cuts due to drone attacks are a strong signal that oil supply may tighten sooner than expected. This news comes at a time when the market was already tightening. The latest EIA report last week showed an unexpected drop in crude inventory by 3.2 million barrels, indicating strong demand as autumn approaches. We believe the new risk to Russian oil supply, combined with falling U.S. reserves, strongly suggests that prices could rise in the near future. Looking back at the market’s reaction to initial supply disruptions in early 2022, we see that price changes can happen quickly and dramatically. Although the current situation differs, the basic issue of a major producer facing output limits remains the same. Thus, we should prepare for increased volatility and a possible sharp price increase if Russian production cuts are confirmed.

    Options Market Response

    The options market is already showing this increased concern. We are seeing a notable rise in the price of call options, with implied volatility for front-month WTI contracts climbing by 4% in just the last two trading sessions. This indicates that traders are actively buying protection against, or betting on, a rapid price rise in the coming weeks. Create your live VT Markets account and start trading now.

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