Oil benchmark Brent approaches the $86 mark amid increased worries about supply levels.

The Brent crude oil benchmark lingered near the $86 per barrel mark on Monday amidst escalating tensions between Russia and Ukraine, as well as in the Middle East.

Both benchmarks have experienced consistent increases this year, with Brent climbing nearly 11% and WTI advancing approximately 12.5% as of Friday’s closing.

The upward trend is attributed to the belief that a persistent recession is being averted, as interest rates in major economies are anticipated to decrease by summer. Additionally, the OPEC+ consortium of oil producers has prolonged supply restrictions into the second quarter, further influencing the trajectory.

Sources informed Reuters that a Russian oil refinery suffered a 50% reduction in capacity due to a drone strike over the weekend, marking the most recent incident in a series of attacks carried out by Ukraine this month.

Last week and over the weekend, Russia launched attacks on Ukrainian generating and transmission facilities, resulting in power outages across several regions.

In the Middle East, Israeli forces pressed on with their offensive in Gaza on Sunday, with U.S.-backed mediation by Qatar and Egypt having failed to secure agreement between Israel and Hamas on a ceasefire.

In another incident, U.S. forces intercepted six Houthi drones over the southern Red Sea after the group targeted a Chinese-owned oil tanker with four missiles, according to a statement from U.S. Central Command on Saturday.

Predictions for oil demand in 2024 have seen slight improvements as the global economy bounces back from the pandemic-induced downturn, despite concerns about inflation. However, OPEC has opted to maintain its restrictions on supply.

This has established a notable reserve that could be utilized in the event of a real scarcity in supply, an important factor when debating the possibility of a prolonged surge in Brent oil prices above $90 per barrel.