Oil prices up as geopolitical tensions fuel supply concerns

Oil prices increased on Monday amid global supply concerns supported by heightened geopolitical risks.

International benchmark Brent crude traded at $85.21 per barrel at 10.29 a.m. local time (0729 GMT), a 0.45% rise from the closing price of $84.83 per barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $81.01 per barrel at the same time, a 0.47% increase from the previous session that closed at $80.63 per barrel.

Since major oil routes are still under threat from ongoing attacks on oil refineries and as the conflict between Russia and Ukraine intensifies, geopolitical risks continue to impact oil prices.

Last week, the Russian governor of the Rostov region, Vasily Golubev, stated on Telegram that attacks by Ukrainian drones had shut down the largest oil refinery in the southern part of the country.

The official said drones fell on the territory of the Novoshakhtinks refinery, which has an annual oil processing capacity of 7.5 million tons.

Furthermore, hopes of a cease-fire in the Middle East subsided after the UN failed to pass a cease-fire resolution on Gaza on Friday.

The UN Security Council was set to vote on a US draft resolution calling for an immediate cease-fire in Gaza linked to the release of all hostages.

On Friday, Russia and China, two of the five permanent Security Council members, vetoed the US-proposed resolution.

Meanwhile, the rise of the US dollar against other currencies is expected to reduce demand and slow the rise in oil prices.

The US dollar index increased by 0.33% to 104.35 at 10.22 a.m. local time (0722 GMT) on Monday.