Oil slips but heads for biggest weekly gain in 3 months on geopolitical tensions

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Oil futures ticked lower on Friday but were set for their biggest weekly gain in three months, driven by heightened geopolitical tensions after Ukraine’s attacks on Russia’s energy infrastructure prompted Moscow to curb fuel exports.

WTI crude (CL1:COM [https://seekingalpha.com/symbol/CL1:COM]) fell 0.4% to $64.75/bbl, while Brent (CO1:COM [https://seekingalpha.com/symbol/CO1:COM]) dipped 0.4% to $69.18. Both benchmarks are set to register their biggest increases since mid-June.

Russia will introduce a partial ban on diesel exports until the end of the year and extend an existing ban on gasoline exports, Deputy Prime Minister Alexander Novak said on Thursday.

Meanwhile, European diplomats concluded that a recent Russian incursion into Estonia was a deliberate tactic ordered by Russian commanders. They subsequently warned that NATO is ready to respond to any further violations of its airspace with full force, including shooting down Russian planes, echoing previous comments by President Trump.

"This ratchets up the tensions in the Russia-Ukraine war and raised the prospect of increased pressure on Russia via additional sanctions on its oil industry," ANZ analysts said in a note.

European Commission President Ursula von der Leyen also warned that she’s looking to end Russian oil purchases by the end of the year.

On the supply side, oil flow from Iraq’s Kurdistan region to Turkey will resume on Saturday, two Iraqi oil ministry officials told _Reuters_ on Thursday.

"These geopolitical tensions reversed earlier losses after a landmark agreement was reached to allow the resumption of exports from Iraq’s Kurdistan, which could return up to 500 kb/d to the global market."

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