Oil Falls as OPEC+ Plans November Output Hike; Kurdistan Exports Resume

Oil prices declined after sources indicated OPEC+ may raise production further in November, beyond the 137,000 bpd increase scheduled for October. Brent crude fell 0.94% to $69.47 per barrel, and WTI dropped 1.02% to $65.05, as markets also digested steady U.S. dollar levels and potential impacts of a U.S. government shutdown. The resumption of Kurdistan crude exports via Turkey over the weekend added near-term supply to global markets. Investors are monitoring U.S. inflation and employment data, which influence expectations for Federal Reserve interest rate cuts. Asian markets are focused on China’s industrial profits and easing factory deflation, alongside central bank policy updates from Australia and India.

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Iraq Restarts Kurdish Oil Exports to Turkey at 180,000–190,000 bpd After 2.5-Year Halt

Iraq resumed crude oil exports from its Kurdistan region to Turkey’s Ceyhan port on Saturday at 6 a.m. local time, restarting flows halted since March 2023 after a $1.5 billion arbitration ruling against Turkey. The interim deal between Baghdad, the Kurdistan Regional Government (KRG), and foreign oil producers will restore 180,000–190,000 bpd, with potential to rise to 230,000 bpd. Iraq’s oil ministry said the restart will help lift national exports to nearly 3.6 million bpd, while staying within OPEC’s 4.2 million bpd quota. U.S. pressure was key in pushing for the resumption as Washington seeks to counter Iranian oil exports amid OPEC+’s push for market share. Turkish Energy Minister Alparslan Bayraktar confirmed the restart, which Iraq’s OPEC delegate said supports the country’s case for higher production quotas in the future.

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Kurdistan Crude Exports to Turkey Set to Resume, Boosting Aframax and Suezmax Demand

Exports of Kurdish crude from Iraq to Turkey’s Ceyhan port are set to restart after a two-year halt, following agreements between the Kurdistan Regional Government, the Iraqi state, and international oil companies including Gulf Keystone. The Shaikan field is expected to supply around 230,000 bpd, transported via the Iraq-Turkey Pipeline and handled by SOMO, Iraq’s state marketer. The restart is expected to increase demand for Aframax and Suezmax tankers in the Mediterranean, as pipeline exports resume and regional flows normalize. Interim arrangements will compensate oil companies for production and transportation costs, potentially raising realized prices above $30 per barrel compared with domestic sales.

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OPEC+ Output Falls 500,000 bpd Short of Targets as Capacity Limits Tighten

OPEC+, which accounts for 50% of global oil supply, has produced about 500,000 bpd below target since April, delivering only 75% of planned hikes and leaving output 0.5% under global demand. The group’s eight members who began raising production this year aimed to unwind 2.2 million bpd of cuts by September and start easing another 1.65 million bpd in October, but analysts expect only half of these targets to be met. Saudi Arabia alone contributed 747,000 bpd of the April–August increase, while countries like Algeria, Kazakhstan, Oman, and Russia are already near maximum capacity. Spare capacity across OPEC+ is estimated at 4.1 million bpd, mostly concentrated in Saudi Arabia and the UAE, and Barclays forecasts this will shrink to 2 million bpd by 2026. Brent crude prices have stayed near $69 per barrel, with a $2.39 prompt premium over six-month futures, as markets interpret the production shortfall as a sign of tightening supply.

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China’s Shandong Oil Port to Ban Shadow Fleet and Old Tankers from November

Terminal operators at Huangdao Port in Shandong province, China’s largest entry point for Iranian oil, will implement new rules from November 1 banning shadow fleet tankers and ships over 31 years old. The move targets vessels using fake IMO numbers, those with expired or invalid safety certificates, and ships with pollution or accident records in the past three years. A new risk-rating system will score vessels up to 100 points, with those scoring below 55 classified as high risk and barred from anchoring. Analysts suggest the measures reflect both environmental concerns and growing U.S. sanctions pressure, though Huangdao plays only a minor role in handling high-risk vessels compared with other Shandong terminals. The rules follow the U.S. designation of Dongjiakou port nearby for receiving sanctioned Iranian oil, underscoring the geopolitical backdrop of the move.

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Unipec, BP and Vitol Lead North Sea Crude Bidding Surge, Supporting Prices

BP, Vitol, and China’s Unipec led heavy bidding in the North Sea physical market, marking a shift from a seller-dominated environment and signaling a stronger-than-expected market. The surge in bids, particularly for Forties crude, has pushed up physical differentials by $1 per barrel over two days, despite expectations of a global supply surplus. While overall North Sea supply remains ample, tightening signs are emerging as more US crude flows eastward, reducing European availability, and Vitol booked a supertanker for Asia. The activity reflects robust demand for barrels that set the Dated Brent benchmark, which influences more than two-thirds of global traded crude and associated derivatives. Traders note that positioning in swaps contracts has been heavily bearish, but the recent physical bidding may propel prices higher heading into the final months of the year.

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Nanjing Tanker Orders $137M Twin LR1s at Dalian Shipbuilding as Part of Fleet Expansion

Shanghai-listed Nanjing Tanker is expanding its fleet with two 65,000-dwt LR1 crude/product tankers, ordered from Dalian Shipbuilding for $136.8 million, or $68.4 million per vessel, with delivery slated for the second half of 2028. The new vessels will feature methanol dual-fuel readiness, a bow loading system, and compliance with IMO Tier III emission standards, enhancing the company’s competitiveness and sustainability in crude transport. This order marks Nanjing Tanker’s third newbuilding project in 2024, following a 9,500-cbm ethylene carrier and two 115,000-dwt aframax crude/product tankers also scheduled for delivery in 2028. With this deal, the company’s 65,000-dwt Panamax orderbook totals six ships, four of which are being built at Guangzhou Shipyard International for deliveries between 2027 and 2028. Nanjing Tanker, a subsidiary of China Merchants Group, currently operates 62 vessels, transporting crude, refined products, chemicals, and gas, while its Singapore-based Nanjing Oil Shipping subsidiary has commissioned four additional 50,000-dwt product carriers.

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PetroChina Boosts Shale Oil Reserves by 1.15 Billion Barrels at Pilot Project

PetroChina has added 158 million metric tons (1.15 billion barrels) of proven shale oil reserves at its Daqing Gulong pilot project in Heilongjiang province, northeast China. The project, covering 2,778 square kilometers, is currently producing about 25,550 bpd and began test production in 2022. This effort is part of China’s push to develop harder-to-access hydrocarbon resources amid declining domestic oil output. The expanded reserves are expected to raise PetroChina’s shale oil production to over 6.8 million tons (136,000 bpd) in 2025. Last year, PetroChina produced around 5 million tons, primarily from the Qingcheng and Jimsar shale oil fields.

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Turkey Cuts Russian Oil Imports Amid U.S. Pressure and Price Cap Challenges

Turkey, the second-largest buyer of Russian Urals crude after India, has reduced imports to around 1.2 million tons in September, down from 1.6 million tons in June, marking the lowest level since April. The decline comes as U.S. President Donald Trump pushes allies to halt Russian oil purchases to weaken Moscow’s war financing, following talks with Turkish President Recep Tayyip Erdogan. While Turkey has not joined Western sanctions, it complies with international trade restrictions and earlier cut imports when Urals prices exceeded the $60 per barrel price cap. After Urals dropped below the cap in April, Turkish refiner Tupras resumed purchases, but the EU and UK lowering the cap to $47.60 in July complicated further buying. Despite Ankara’s close ties with Moscow, Trump said he believed Turkey may agree to reduce purchases in exchange for potential relief from U.S. sanctions.

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Pemex Crude Exports Drop 32% in August Amid Refinery Boost

Mexican state oil company Pemex exported 500,203 bpd of crude in August, down 32% year-on-year, as local refinery processing slightly increased. Crude and condensate production held steady at 1.64 million bpd, constrained by budget limits, mounting debt, and declining Gulf of Mexico fields. Pemex’s seven refineries processed just over 1.05 million bpd, leading to a reduction in crude exports and a fall in petroleum product imports to 457,849 bpd, down 38% year-on-year. The government aims to raise national crude production to 1.8 million bpd, but heavy sour Maya crude remains challenging for domestic refineries to process efficiently. Petroleum product output reached 1.07 million bpd, slightly below July’s 1.09 million bpd but up 4% from last year.

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Suezmaxes Set to Benefit from Guyana’s New Output, VLCCs Face Seasonal Limits

Guyana’s new offshore Yellowtail field is adding 250,000 bpd of crude, increasing total Stabroek block capacity past 900,000 bpd, and creating fresh demand for Suezmax tankers in the South Atlantic. Seasonal restrictions prevent VLCCs from loading in Guyana between September and January, shifting exports onto smaller Suezmax vessels and effectively boosting tonne-mile demand. The new crude, marketed as Golden Arrowhead, is lighter and sweeter, making it more attractive for refining and potentially increasing interest from Asian buyers. While much of Guyana’s exports currently stay within the Atlantic Basin, a redirection east of Suez could further lengthen voyages and strengthen Suezmax demand. Combined with growing production and seasonal effects, the South Atlantic Suezmax market is expected to see robust activity in Q4, while VLCCs remain largely sidelined.

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Dangote Refinery Faces Backlash Over Mass Layoffs Amid Sabotage Claims

Nigeria’s Dangote refinery, Africa’s largest with a 650,000 bpd capacity, announced layoffs citing sabotage, though the oil workers’ union PENGASSAN accused the company of unjustly firing over 800 Nigerian workers to replace them with 2,000 Indian staff. The refinery insisted the move was a necessary safety measure and that more than 3,000 Nigerian employees remain on staff, while denying anti-union motives. PENGASSAN, however, condemned the dismissals, alleging workers were terminated for joining a union, calling it “totally wrong.” The refinery’s gasoline unit has been shut since late August for 2–3 months of repairs, leading to increased fuel oil exports in September, typical during outages. The plant, which only began operations in January 2024, has quickly become a swing supplier in the Atlantic Basin with the potential to reshape global fuel markets.