Oil Prices Steady Near Seven-Week High on Russian Export Ban and Strong U.S. GDP

Brent crude settled at $69.42 per barrel (+0.16%) and U.S. WTI at $64.98 (–0.02%) on Thursday, holding near seven-week highs after a 2.5% surge the previous day. Prices were supported by Russia’s decision to partially ban diesel exports and extend gasoline restrictions until year-end following Ukrainian drone strikes on refineries. U.S. crude inventories also fell unexpectedly, adding to supply concerns. However, upside momentum was capped as U.S. GDP was revised upward to 3.8% annualized growth last quarter, raising expectations the Federal Reserve may slow its pace of rate cuts after a 25-bps reduction last week. Additional pressure came from Iraq and the Kurdish Regional Government’s agreement to resume about 230,000 bpd of exports via Turkey, fueling oversupply concerns.

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U.S. Lawmakers Push Russia Shipping Sanctions as Trump Administration Stalls

Bipartisan U.S. lawmakers introduced the Shadow Fleets Act to expand sanctions on ships carrying Russian oil and gas, targeting older, re-flagged tankers used to evade existing measures. The bill, led by Senators Jim Risch and Jeanne Shaheen with other Republicans and Democrats, would create strict liability for ship-to-ship transfers with sanctioned vessels, provide indicators to identify shadow fleet ships, and align U.S. sanctions with European measures, including Arctic LNG projects. Despite this, the Trump administration has not blacklisted any Russian ships since taking office eight months ago, relying instead on Europe to reduce Russian oil imports and imposing secondary tariffs on countries like India. Experts argue that the lack of U.S. action undermines pressure on Moscow, as shadow fleet tankers still transport a large share of Russian crude—54% of August shipments via G7+ flagged vessels—with only 12% sanctioned. The European Union and UK have been more aggressive, adding 118 vessels to their blacklists, but loopholes remain, highlighting the challenge of enforcing sanctions effectively.

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Russia Bans Diesel Exports by Traders, Extends Gasoline Restrictions

Russia will impose a partial ban on diesel exports until year-end and extend its gasoline export ban, Deputy Prime Minister Alexander Novak announced, following Ukrainian drone attacks that have reduced refining capacity by nearly 20% on some days. The refinery disruptions have cut fuel exports and created shortages in several Russian regions, pushing Moscow close to curbing crude output. Russia produced about 86 million metric tons of diesel in 2024, exporting roughly 31 million tons, making it—along with the U.S.—one of the world’s top seaborne diesel exporters. The diesel export ban targets re-sellers but not producers, who account for about 75% of exports via pipelines to Baltic and Black Sea ports, while the gasoline ban applies to both producers and traders but exempts inter-governmental agreements, such as with Mongolia. After the announcement, low-sulphur gasoil futures rose over 5% to a $26.14 premium to Brent crude, near its highest level since late July.

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Russia Resumes Black Sea Oil Loadings After Drone Strikes Temporarily Halt Exports

Two key oil terminals on Russia’s Black Sea coast—the Caspian Pipeline Consortium (CPC) and Transneft’s Sheskharis facility near Novorossiysk—resumed tanker loadings after briefly halting operations during Ukrainian drone attacks. The attacks damaged CPC’s city office, injuring two employees, and prompted temporary remote operations, with the company warning of potential large-scale environmental risks. Vessel-tracking data showed the million-barrel tanker Regal I and Aframax-class Navigator Ridge departing Novorossiysk fully or partially loaded, while petroleum product shipments also continued from Rosneft’s Tuapse terminal despite strikes. Together, the Sheskharis and CPC facilities handle over 2 million bpd of Russian and Kazakh crude exports, representing a significant share of the ~40 million bpd global seaborne supply.

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India Seeks U.S. Permission to Import Iranian Oil Amid Russian Crude Sanctions

India has asked the U.S. to allow crude imports from Iran and Venezuela to offset any further reductions in Russian oil supplies, warning that cutting access to all three sources could spike global prices. Indian officials emphasized this during a delegation visit to the U.S., amid tariffs imposed on India for continuing purchases of discounted Russian crude. Reliance Industries and other refiners have reduced Venezuelan and Iranian imports due to U.S. sanctions, while Russian barrels remain cheaper, averaging $68.90 per barrel in July versus $77.50 from Saudi Arabia and $74.20 from the U.S. Indian Commerce Minister Piyush Goyal stated that increasing U.S. oil and gas imports is a key part of the country’s energy security strategy.

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India’s August Refinery Throughput Falls 4.4% Amid Monsoon Disruptions, Fuel Exports Rise

Indian refiners’ crude processing fell 4.4% month-on-month in August to 5.27 million bpd (22.29 million metric tons) from July’s 5.51 million bpd (23.31 million tons), according to provisional government data. The decline was attributed to seasonal monsoon disruptions, scheduled maintenance, and reduced operations at one refinery, though throughput rose 3% year-on-year. India’s fuel consumption dropped 3.8% month-on-month to 18.73 million metric tons, marking an 11-month low. Despite lower domestic demand, gasoline and diesel exports reached multi-year highs, aided by expanded refining capacity and increased ethanol blending, with gasoline exports expected to hit a record 400,000 bpd. Major contributors included RIL’s Jamnagar and SEZ refineries (3.0 million and 2.87 million tons in August, respectively), IOCL Paradip (1.42 million tons), and BPCL Kochi (1.55 million tons), supporting both European winter supply and domestic refining margins.

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Iraq and Kurdish Region Strike Historic Deal to Resume Oil Exports via Turkey

Iraq will restart oil exports from its Kurdish region to Turkey after more than two years of suspension, following what Prime Minister Shia al-Sudani called a “historic agreement” with the Kurdistan Regional Government (KRG). The deal involves Iraq’s state marketer SOMO handling all Kurdish crude exports through the Kirkuk-Ceyhan pipeline, with exports set to resume within 48 hours. Flows had been halted since March 2023, when Turkey was ordered by the International Chamber of Commerce to pay Iraq $1.5 billion for unauthorized Kurdish oil exports. Prior to the shutdown, Iraq exported around 230,000 bpd from the Kurdish region, with eight companies covering over 90% of Kurdish production now agreeing in principle to the restart. U.S. Secretary of State Marco Rubio welcomed the deal, citing stronger U.S.–Iraq economic ties, improved regional energy security, and reinforced Iraqi sovereignty.

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Shipowners Clash with IMO and Trump Over Pace of Maritime Decarbonisation

Shipping’s plan to reach net zero by 2050 faces pushback from a coalition of shipowners, including Frontline, Angelicoussis Group, Hanwha Shipping, and Saudi Arabia’s Bahri, who argue that the IMO’s Net-Zero Framework is too aggressive and the industry is not ready for emerging climate-friendly fuels. The framework, set for adoption next month, would impose binding emission targets and create a $13 billion annual net-zero fund from 2028, but shipowners complain it fails to properly reward LNG, a transition fuel with existing infrastructure. Green ammonia, green methanol, and nuclear power remain years from commercial adoption, while uncertainty over which fuel will dominate has limited newbuildings despite billions invested in next-generation ships. Opposition also comes from the U.S., with former President Trump calling the plan the “greatest con job ever,” highlighting political and economic hurdles for global decarbonisation. Experts warn the dispute could slow short-term emission reductions, with immediate gains still relying on efficiency improvements and wind propulsion while the current fleet continues burning fuel oil beyond 2040.

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BP Delays Oil Demand Peak Forecast to 2030 Amid Slower Energy Efficiency Gains

BP’s latest Energy Outlook projects global oil demand will now peak in 2030 at 103.4 million bpd, five years later than last year’s forecast of 2025, due to weaker-than-expected energy efficiency gains. Under the “Current Trajectory” scenario, demand could rise further to 106 million bpd by 2035 before declining to 83 million bpd in 2050, while a “Below 2-Degrees” pathway sees demand peaking this year at 102.2 million bpd and dropping sharply to 33.8 million bpd by 2050. U.S. onshore oil production remains steady near 15 million bpd, but Brazil and Guyana expand output to around 5 million and 2 million bpd respectively by 2035. CO₂ emissions under the Current Trajectory stay flat to 2030 before falling 25% by 2050, compared with a 90% decline in the Below 2-Degrees scenario. Global electricity demand is expected to more than double by 2050 to over 40,000 terawatt hours, with wind and solar providing over 50% of generation, while LNG trade surges to 900 bcm by 2035, led by U.S. and Middle East exports.