Oil Prices Drop 3% on OPEC+ Output Hike Plans and Kurdistan Exports Resumption

Oil prices fell around 3% on Monday as OPEC+ plans to raise production in November and the resumption of exports from Iraq’s Kurdistan region via Turkey increased expectations of global supply. Brent crude fell to $67.97 per barrel, while U.S. WTI dropped to $63.45, after hitting multi-month highs last week. OPEC+ is expected to boost output by at least 137,000 bpd to regain market share, despite currently producing about 500,000 bpd below targets. Kurdistan crude flows through the Iraq-Turkey pipeline resumed for the first time in 2½ years, currently at 150,000-160,000 bpd, potentially rising to 230,000 bpd. The price decline followed last week’s gains driven by Ukrainian drone attacks on Russian energy infrastructure, which temporarily tightened supply.

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Dutch Cargo Ship Minervagracht Ablaze and Adrift in Gulf of Aden After Attack

The Dutch-flagged cargo ship Minervagracht caught fire and is drifting in the Gulf of Aden after being struck by an explosive device, prompting a helicopter rescue of its 19 crew. Crew members, who are Russian, Ukrainian, Filipino, and Sri Lankan, included one seriously injured and one stable after the incident. The explosion occurred 128 nautical miles southeast of Aden, Yemen, though it is unclear whether Iran-aligned Houthis carried out the attack. This would be the first Houthi attack on a commercial ship in the Red Sea or Gulf of Aden since early September, following previous assaults on vessels including the Scarlet Ray, Magic Seas, and Eternity C. The ship had not requested prior protection, and the incident adds to ongoing security concerns in the Gulf of Aden and Red Sea shipping lanes.

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Saudi Arabia Likely to Raise November Crude Prices to Asia Amid Rising Supply

Saudi Arabia is expected to increase November crude oil prices for Asian buyers, with Arab Light rising 20–40 cents per barrel to $2.40–$2.60 above benchmark levels. Other grades—Arab Extra Light, Arab Medium, and Arab Heavy—could see increases of 30–60 cents per barrel compared with October. The price adjustments reflect gains in Middle East benchmarks, although rising supplies, including Kurdistan exports, may limit the increases. The forecast aligns with a $0.52 monthly rise in Dubai crude premiums earlier in September, though recent oversupply concerns have softened the rally. Saudi Aramco sets prices based on customer recommendations and market yields.

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North Sea Crude Supply to Increase in November

Supply of the five North Sea crude grades that underpin the Dated Brent benchmark is expected to rise to 583,000 bpd in November, up from 542,000 bpd in October. The grades include Brent, Forties, Oseberg, Ekofisk, and Troll. Notable changes include Ekofisk rising from 203,000 to 257,000 bpd and Forties increasing slightly to 163,000 bpd. Troll supply is expected to decrease to 70,000 bpd, while Oseberg and Brent remain relatively stable. U.S. WTI Midland crude, also part of the benchmark, does not have a reported loading programme.

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China’s Refining-Capacity Cuts Stumble as Regional Priorities Clash with Beijing Mandates

China’s plan to reduce oil refining overcapacity is facing setbacks as regional governments prioritize local growth and employment over central directives. In Shandong, many smaller “teapot” refineries, targeted for closure, are receiving tax breaks, import quotas, and support to resume or maintain operations, despite central efforts to shift production toward higher-value petrochemicals. Analysts warn that national capacity may only fall slightly—or even rise—by 2030, as new, modern facilities come online while older plants linger or restart. The gap between central mandates and regional incentives illustrates a broader challenge in China’s anti-overcapacity campaign, particularly in sectors like refining and steel where declining demand is evident. Overall, efforts to reduce capacity risk being undermined by local economic pressures, complicating Beijing’s goal of a sustainable, modernized industrial base.

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Shandong Yulong Petrochemical Brings Second Steam Cracker Online

Shandong Yulong Petrochemical has commissioned its second 1.5 million ton-per-year steam cracker, producing on-spec ethylene since mid-September. The unit has ramped up to high output rates, sources familiar with operations said. The company now runs two 200,000 bpd crude units at its $20 billion Longkou complex, with the first steam cracker started late last year. Ethylene from the facility will support plastics production, agricultural uses, and chemical manufacturing. Yulong has not yet begun paraxylene output, but a public consultation for a production unit was launched on September 1.

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TotalEnergies Predicts Limited Non-OPEC+ Oil Supply Growth Post-2026 Amid Rising Demand

TotalEnergies expects oil production outside OPEC+ to stagnate after 2026, while global consumption continues to rise through the end of the decade. The company forecasts spare output capacity shrinking from 2027 due to lower oil prices reducing investment, with non-OPEC+ supply declining between 2028 and 2030. Total highlighted that OPEC+ is regaining market control by restarting idled output quickly this year to outpace rivals. While a market surplus is likely in Q1 next year, current oversupply has been mitigated by strong Chinese buying and potential disruptions to Russian supply from drone strikes. The outlook underscores a tightening long-term market, emphasizing the growing influence of OPEC+ over global oil dynamics.

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BP and TotalEnergies Boost U.S. Oil and Gas with $5B Offshore Project and Oklahoma Gas Deal

BP has approved the $5 billion Tiber-Guadalupe offshore project in the Gulf of Mexico, which will start production in 2030 with an 80,000 boed floating platform tapping into an estimated 350 million boe in recoverable resources. This aligns with BP’s plan to lift U.S. production to just over 1 million boed by 2030, nearly half its global target of 2.3–2.5 million boed. BP may also sell minority stakes in Tiber and its Kaskida project to manage capital. Meanwhile, TotalEnergies will acquire a 49% stake in Continental Resources’ Oklahoma gas fields, expected to yield 150 million cubic feet/day (≈26,000 boed) by 2030. The move will strengthen Total’s U.S. upstream output, which was 93,000 boed in 2024 (3.8% of global production), helping balance its 10 mtpa U.S. LNG purchases with domestic supply growth.

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VLCC Spot Market Sees Charterers Gaining as OPEC+ Output Hints Lift Owners’ Prospects

The VLCC spot market is showing signs of shifting power back to charterers, despite rates remaining elevated, with modern scrubber-fitted vessels assessed at $96,000/day from the Middle East Gulf to Asia. Cargo enquiries and uncertain itineraries have given charterers confidence to push for lower rates, exemplified by Shipping Corp of India’s 317,000-dwt Desh Vibor earning just $44,000/day for a recent India run. Analysts note that a potential OPEC+ output increase, rumored at 137,000 bpd for November, could provide upside for tanker owners by adding more barrels into transit. Average TD3C Middle East Gulf–China spot rates have stayed above $74,000/day for 12 consecutive trading days, and low prompt tanker availability supports continued strong freight.