Oil Rises on Weaker Dollar and Concerns Over Russian Supply

Brent crude rose 1% to $68.15 per barrel, while WTI gained 1.1% to $64.68, supported by a weaker dollar and concerns over intensified airstrikes in Russia and Ukraine. Weekly Russian oil shipments fell to a four-week low of 2.72 million bpd, fueling supply worries. Chinese manufacturing data showed its fastest growth in five months, adding further support to oil prices. Investors are also watching the upcoming OPEC+ meeting on September 7 to see if output targets will be increased, which could influence market sentiment. Despite recent gains, analysts caution that rising OPEC+ supply and growing inventories may limit oil’s upside in the near term.

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Traders Expect OPEC+ to Maintain Flat Oil Output at Weekend Meeting

Oil traders anticipate that OPEC+ will keep crude production unchanged at their upcoming weekend meeting, following a period of accelerated supply increases. The group has already restored 2.2 million bpd of previously curtailed output ahead of schedule, contributing to expectations of a global surplus by year-end amid slowing Chinese demand and rising US, Brazil, and Canadian supplies. Brent crude is trading near $68 per barrel, down about 9% this year, reflecting the pressure from the production surge. Most analysts expect OPEC+ to hold output steady in October, while some foresee a modest increase; the producers have indicated that further adjustments will depend on evolving market conditions. Market observers also suggest that OPEC+ could be forced to cut production next year to prevent a large supply glut.

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Saudi Aramco and Iraq’s SOMO Halt Crude Sales to Nayara After EU Sanctions

Saudi Aramco and Iraq’s state oil company SOMO have stopped supplying crude to India’s Nayara Energy following EU sanctions in July targeting the Russian-backed refiner. As a result, Nayara relied entirely on Russian crude from Rosneft for its imports in August. Normally, Nayara receives around 2 million barrels of Iraqi crude and 1 million barrels of Saudi crude monthly, but shipments from both suppliers were halted last month. The sanctions have caused payment and logistical difficulties, forcing Nayara to operate its 400,000 bpd Vadinar refinery at roughly 70–80% capacity and rely on “dark fleet” vessels for deliveries. The refiner has also undergone leadership changes, with a new CEO appointed from Azerbaijan’s SOCAR.

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EU’s Lower Russian Oil Price Cap Pressures Greek Tanker Owners Amid US Mismatch

The EU and UK are lowering the Russian crude oil price cap to $47.60 per barrel, diverging from the US, which keeps its cap at $60, creating confusion across global shipping and insurance markets. Greek shipowners — including TMS Tankers, Dynacom, Thenamaris, Minerva Marine, and Delta Tankers — who have profited from trading Russian oil under the old regime, will now face tighter restrictions. Insurance complications arise because non-European P&I clubs in the US and Japan could only provide up to $10m in cover, far below the value of most tankers worth $50m–$60m, discouraging owners from engaging in such trades. The London insurance market warned underwriters to cancel policies tied to American lead insurers that cannot comply with the lower European cap, highlighting the complexity of multi-layered shipping insurance. While mainstream owners avoid Russian oil, the new two-tier cap, effective this week and fully in place by 18 October, will further squeeze European operators while leaving the US approach unchanged.

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Syria Exports First Crude Oil Shipment in 14 Years

Syria exported 600,000 barrels of heavy crude oil from the port of Tartus on Monday, marking its first official oil export in 14 years, according to a Syrian energy official. The oil was sold to B Serve Energy, affiliated with global trading firm BB Energy, and shipped on the tanker Nissos Christiana. Syria’s oil production and exports were devastated by nearly 14 years of conflict following protests against Bashar al-Assad in 2011, with most oilfields located in the northeast under Kurdish-led control. U.S. sanctions were lifted in June under President Trump, enabling U.S.-based firms to support exploration and extraction projects. Additionally, Syria signed an $800 million deal with DP World to develop a multipurpose terminal at Tartus, replacing a Russian-operated contract.

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Caspian Pipeline Consortium Reports Two of Three Black Sea Moorings Operating

The Caspian Pipeline Consortium (CPC), which transports about 1.5% of global oil mainly from Kazakhstan, said it has brought one of its Black Sea mooring points back into operation following maintenance. Mooring points SPM 1 and SPM 3 are now operating, with SPM 3 returning from scheduled maintenance that began on August 15. Operations at SPM 2 remain suspended after an accident and oil spill last week during a loading operation. CPC normally uses two mooring points while keeping a third as a backup, so current operations are within standard practice. The consortium, which includes shareholders such as Chevron and ExxonMobil, has faced previous disruptions due to maintenance, storms, spills, and security incidents, including a Ukrainian drone strike.

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VLCC Spot Rates Face Short-Term Weakness but Rebound Expected on Rising Exports

VLCC spot rates fell sharply last week, with the Middle East–Asia route assessed at $46,000/day, down 11%, as charterers pulled back after heavy early-September activity. Analysts at Clarksons Securities expect this to be a temporary dip, predicting a “sharp rebound” supported by Saudi Arabia’s 10m bpd production, up 1m bpd from earlier this year. Arbitrage has opened for Atlantic-to-Asia flows, with Brent crude trading at a $0.09 discount to Dubai, boosting long-haul freight demand. China’s oil demand rose 0.5m bpd year-on-year, providing further confidence for winter, while US Gulf volumes in October are expected to help floor rates. Still, brokers like Gibson and Sentosa caution that weaker cargo counts—down to 8 from 18 in the Middle East last week—could push rates lower before the recovery takes hold.

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Houthis Extend Reach with Red Sea Missile Attack on Eastern Pacific Tanker

A 20,000-dwt chemical tanker, Scarlet Ray (built 2020), owned by Idan Ofer’s Eastern Pacific Shipping, was targeted by a Houthi ballistic missile about 40 nautical miles southwest of Yanbu, Saudi Arabia. The attack marked a rare escalation north of the Red Sea’s 18-degree latitude, previously outside the Houthis’ usual strike zone. No damage or injuries were reported, and the Liberian-flagged vessel continues its voyage under the crew’s command. The strike came days after the Houthis’ self-proclaimed prime minister, Ahmed Ghaleb Nasser al-Rahawi, was killed in an Israeli airstrike on Sanaa, along with other senior officials. Analysts warn that repeated attacks near Saudi Arabia’s EEZ could provoke a stronger regional response as Houthis continue their campaign against vessels linked to Israel.

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EU Considers 10-Year Delay on Aviation and Shipping Fuel Taxes

EU countries are exploring a 10-year delay in implementing EU-wide taxes on aviation and shipping fuels to ease the path for broader energy tax reforms, according to a draft seen by Reuters. The proposed overhaul, originally introduced by the European Commission in 2021, aims to tax CO2-emitting fuels used in flights and maritime transport, which currently benefit from EU-wide exemptions. During the proposed delay, only small aircraft (up to 19 seats) and private pleasure boats might face taxes, while larger commercial aviation and shipping remain exempt to protect EU companies’ competitiveness. The draft, prepared by Denmark, will be discussed by negotiators in Brussels, with a goal of reaching a deal by November. Resistance remains from countries with significant shipping or tourism sectors, highlighting the challenges of achieving unanimous approval for EU tax policy changes.