Oil Holds Steady as Markets Eye US-China Trade and Supply Outlook

Oil prices stabilized after a third consecutive weekly decline, with Brent near $61 per barrel and WTI above $57 per barrel, as investors monitored US-China trade developments. President Trump expressed optimism for a potential deal, noting that previously threatened tariffs on China were no longer viable. Downward pressure persists due to swelling supply forecasts into late 2025 and 2026, as highlighted by the International Energy Agency. Meanwhile, Ukrainian attacks on Russian energy infrastructure could trigger periodic price spikes. Citigroup analysts suggest that a de-escalation in the Ukraine conflict could push oil prices toward $50 per barrel.

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IMO’s One-Year Delay on Carbon Levy Shatters Hopes for Global Green Shipping Plan

The International Maritime Organization voted 57–49 to delay its Net Zero Framework for a year, derailing efforts to establish shipping’s first global carbon levy aimed at achieving net-zero emissions by 2050. The decision followed intense lobbying by the US, backed by Saudi Arabia, Iran, Russia, and others, with President Donald Trump urging nations to reject what he called a “Global Green New Scam Tax.” The setback leaves the industry facing a fragmented patchwork of regional carbon taxes, with the EU already implementing its own scheme and other regions like Africa and China considering similar plans. Industry leaders, including ICS secretary general Thomas Kazakos, warned that the delay undermines investment certainty and risks discouraging funding for green technologies. IMO chief Arsenio Dominguez acknowledged the disappointment but urged shipowners and states to continue investing in decarbonisation, insisting that the framework and talks remain alive despite the bitterly divided vote.

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Ceasefire in Gaza Frays as Israel Strikes Hamas and Suspends Aid

Israel launched airstrikes on Hamas targets across Gaza, dismantling tunnels and halting aid shipments, after blaming the group for a deadly ambush that killed two Israeli soldiers, though it later announced renewed ceasefire enforcement. The escalation follows a partial implementation of Donald Trump’s peace plan, which calls for Hamas disarmament and a foreign-supervised Palestinian administration, with Israel maintaining control over parts of the enclave. Palestinian casualties continue to mount, with reports of dozens killed during Israeli operations, while Hamas insists it remains committed to the truce but cannot control fighters in Rafah. The humanitarian situation remains fragile as Israel indefinitely postpones reopening the Rafah border terminal, and post-war stabilization efforts are being coordinated by a U.S.-led multinational task force with support from other countries. Both sides face domestic and international scrutiny after two years of war, which resulted in over 67,000 deaths in Gaza and significant Israeli military losses.

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Global Oil Surplus Signals Market Shift

Over 1 billion barrels of oil are now afloat on tankers, the largest since 2020, as rising production from OPEC+, the US, and other countries pushes the market toward surplus. China’s strategic stockpiling has absorbed much of the excess, while futures prices have dropped to five-month lows and the curve has shifted from backwardation to contango, indicating abundant supply. US crude inventories have climbed for three straight weeks, with traders securing storage for January in anticipation of a glut. The IEA projects global stockpiles are increasing by 1.9 million bpd, with a potential record surplus next year, though production limits and geopolitical factors could moderate the oversupply. Analysts foresee short-term price declines but expect crude to recover to the mid-$60s per barrel within a year.

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Western Pressure May Curb Asian Russian Oil Imports, India Likely to Cut Gradually

U.S. and European efforts to limit Russian energy purchases are expected to restrict India’s imports from December, potentially leaving China to benefit from cheaper crude, while Japan will likely continue Sakhalin LNG imports under long-term contracts. London has imposed sanctions on India’s Nayara refinery and China’s Yulong Petrochemical, prompting caution among buyers as additional EU or U.S. measures could follow. Indian refiners are reported to be gradually cutting Russian crude by up to 50%, though the impact may not be visible until December or January, with China possibly taking some of the diverted volumes. To diversify supply and mitigate the effect of potential cuts, Indian refiners have bought rare Guyanese crude, while Taiwan’s Russian naphtha imports are expected to decline amid criticism from NGOs. U.S. calls for Japan to halt Russian energy imports face practical challenges, as Russian LNG remains a key stable source and replacing it on the spot market would be costly and complex.

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Indian Refiners Buy Guyanese Crude Amid Diversification Push

Two Indian refiners have made rare purchases of Guyanese crude, acquiring a total of 4 million barrels from ExxonMobil for delivery at the end of 2025 or early 2026. Indian Oil Corp bought 2 million barrels of Golden Arrowhead crude, while Hindustan Petroleum purchased 2 million barrels of Liza and Unity Gold grades, marking their first acquisitions of these types. The move reflects India’s effort to diversify crude supplies and reduce reliance on Russian oil amid U.S. pressure to curb such imports. Exports of the new Golden Arrowhead grade reached a record 938,000 bpd in October.

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$11bn Indian Refinery Boosts Tanker Demand Prospects

Bharat Petroleum plans to invest nearly $11bn in a new 180,000–240,000 bpd refinery in Andhra Pradesh, with commercial operations targeted for January 2029, backed by state incentives covering 75% of capital expenditure over 20 years. India’s second-largest refiner currently has 706,000 bpd across three refineries, and new inland capacity of 680,000 bpd expected next year could push coastal plants to export more, supporting product tanker demand. Shipbroker Gibsons highlighted that crude imports will rise as domestic production is forecast to marginally decline, maintaining a positive outlook for crude tankers. Separately, China’s Golden Concord Group is investing $2.5bn in a 70,000 bpd refinery in Ethiopia’s Somali region, with the first phase to be completed in two years. The combined expansion of refining capacity in India and Ethiopia signals sustained growth in regional crude and product shipping needs.

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Fire at BP’s Indiana Refinery Extinguished; Multiple Units Offline

A fire at BP’s 440,000 bpd Whiting, Indiana refinery was extinguished Friday morning, with no injuries reported, though multiple units remain offline. The blaze caused flaring and temporarily shut the 255,000-bpd crude distillation unit, 60,325-bpd vacuum distillation unit, 100,000-bpd cat feed hydrotreater, 24,300-bpd hydrotreater, and the 115,000-bpd fluid catalytic cracker. Some units, including the crude distillation unit, could be offline for up to a week, while the plant was already undergoing planned maintenance on other units. The incident pushed Great Lakes spot gasoline prices up about 20 cents per gallon, compounding earlier supply-tightening effects from regional refinery turnarounds. BP confirmed the operational incident but did not provide further details on the status of remaining units.

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Stateless and False-Flag Shipping on the Rise

Windward reports that the global stateless fleet—vessels evading Western sanctions—has doubled this year, with false-flag registrations up 22% in Q3, including four new fraudulent registries claiming Tonga, Maldives, Mozambique, and Angola. Sanctions by the EU, UK, and US on over 1,000 ships since 2023 have driven flag-hopping, deceptive GPS practices, and growing operational risks, with some vessels reportedly used for drone reconnaissance in the Baltic. The EU is proposing sanctions on three false-flag states—Aruba, Curacao, and Sint Maarten—linked to a network providing services to Russian shadow fleet tankers. GPS jamming incidents affected more than 11,600 vessels in Q3, with a new hotspot at Russia’s Nakhodka Bay and Kozmino crude terminal. Windward warns that ongoing US-China trade tensions, the Russia-Ukraine war, and elevated maritime security threats make shipping risks inseparable from geopolitical developments.

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Investors Eye China’s Fourth Plenum for Policy Boosts and Yuan Stability

China’s Fourth Plenum this week could influence equities and the yuan as policymakers review the 15th five-year plan ahead of a likely Xi-Trump meeting, with the MSCI China Index up about 30% this year. Investors are focusing on “anti-involution” measures to curb cutthroat competition, which has already lifted steel, solar, and lithium stocks, including Ganfeng Lithium (+100%) and Tianqi Lithium (+80%). Technological self-reliance remains a priority, benefiting local chipmakers Hua Hong Semiconductor (+250%) and SMIC (+117%), as well as robotics firm UBTech (+123%), amid reduced foreign tech dependence. Domestic consumption initiatives, like childcare subsidies and trade-in programs, are expected to support consumer stocks such as Alibaba Health and Hisense, particularly after tepid Golden Week spending. Currency watchers are monitoring potential yuan internationalization measures, as Beijing aims to expand cross-border usage and reinforce the yuan’s global role.

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China Expands Biofuel Export Quotas for Sustainable Aviation Fuel

China has granted export quotas to three additional biofuel refiners—Shandong Haike Chemical, Shandong Sanju Bioenergy, and EcoCeres—allowing them to ship sustainable aviation fuel (SAF) overseas, potentially boosting exports to Europe. The total annual quota for the three companies ranges between 788,000 and 828,000 metric tons, bringing China’s SAF export permits in 2025 to around 1.2 million tons, including earlier allocations to Zhejiang Jiaao Enprotech. Shandong Haike Chemical received 370,000 tons, Shandong Sanju Bioenergy 158,000 tons, and EcoCeres 260,000-300,000 tons. While Europe has not yet mandated SAF usage, Chinese producers are scaling up production and targeting the continent as a key market. Companies are not required to fully use their quotas by year-end, and it remains uncertain whether new permits will need reapplication in 2026.