Oil Prices Rise as OPEC+ Plans Pause in Output Hikes for Early 2026

Oil prices rose after OPEC+ announced it will pause production increases during the first quarter of 2026 following a modest 137,000-barrel-per-day hike in December. Brent crude climbed above $65 a barrel and WTI hovered near $61 amid concerns of a growing supply glut. The decision reflects expectations of a seasonal demand slowdown and caution that the market may not absorb additional supply if Russian disruptions prove short-lived. Recent U.S. sanctions on Rosneft and Lukoil have added uncertainty to global supply outlooks. Meanwhile, a Ukrainian drone strike on Russia’s Black Sea facilities, including a Rosneft refinery in Tuapse, has heightened concerns over potential physical supply disruptions.

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OPEC+ to Pause Output Hikes After December Amid Oversupply Concerns

OPEC+ has agreed to a modest oil output increase of 137,000 bpd for December but will pause further hikes in the first quarter of 2026 due to fears of an impending supply glut. Since April, the group has raised output by about 2.9 million bpd, roughly 2.7% of global supply, but recent sanctions on Russia’s Rosneft and Lukoil have complicated production plans. Analysts said the pause is a strategic move to stabilize prices and maintain unity as sanctions inject uncertainty into supply forecasts. Oil prices, which dipped to $60 per barrel in October, have rebounded to around $65 following sanctions and improved market sentiment. The pause also aligns with the seasonally weak demand period from January to March, reflecting OPEC+’s effort to proactively manage market balance.

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Ukrainian Drone Strike Sets Russian Oil Tanker Ablaze in Black Sea

A large-scale Ukrainian drone assault on Russia’s Black Sea region ignited an oil tanker and damaged Rosneft’s oil-loading facilities in Tuapse, which hosts a 240,000-bpd refinery. Russia’s Defense Ministry said 71 drones were shot down over the Krasnodar region and the Black Sea, while Sochi airport temporarily suspended flights amid renewed attack alerts. The Tuapse terminal, with an annual capacity of 17 million tons, exports fuel oil, naphtha, and diesel from several Rosneft refineries. The attack follows intensified Ukrainian strikes on Russian energy infrastructure and coincides with Moscow’s renewed bombardment of Ukraine’s power network ahead of winter. Ukraine also claimed responsibility for a separate pipeline attack near Moscow, while Russian drone and missile strikes overnight killed at least six people, including two children, in Ukraine’s south and center.

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U.S. Oil and Gas Output Hits New Record in August Despite Surplus Concerns

U.S. oil and gas production reached new record highs in August, according to the Energy Information Administration (EIA), as crude output rose by 86,000 barrels per day to 13.8 million bpd. This marks a new all-time high, surpassing July’s revised record of 13.7 million bpd, driven by gains in New Mexico (2.3 million bpd) and the federal offshore Gulf region (1.98 million bpd). Natural gas production from the Lower 48 states also hit a record 122.8 billion cubic feet per day (bcfd), up from 122.1 bcfd in July. Texas saw a 1.2% monthly increase to 38.0 bcfd, while Pennsylvania’s output dipped 0.7% to 20.9 bcfd. The surge in U.S. production has contributed to Brent crude prices falling to about $65 per barrel — roughly 14% lower than a year ago — pressuring OPEC+ to unwind its earlier supply cuts to maintain market share.

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Saudi Arabia Poised to Cut December Crude Prices to Asia Amid Supply Glut

Saudi Arabia is expected to lower its December official selling price (OSP) for Arab Light crude to Asia by $1.20–$1.50 per barrel, bringing it down to a premium of just $0.70–$1.00 over the Oman/Dubai benchmark — the lowest in several months. The move reflects rising global supplies as OPEC+ has increased output by more than 2.9 million bpd, or roughly 2.7% of global production, since April. Other Saudi grades, including Arab Extra Light, Medium, and Heavy, are also expected to see similar price cuts. However, demand from China, India, Japan, and South Korea — seeking alternatives to sanctioned Russian oil — may limit the reductions. Analysts note that with refineries returning from maintenance, Saudi Arabia may have fewer barrels available next month, which could temper the expected price decline.

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Indian Oil Corp Pursues Americas Supply While Maintaining Russian Purchases

Indian Oil Corp (IOC) is preparing for a major crude purchase from the Americas, targeting 24 million barrels from the US, Canada, Brazil, and other Latin American countries for delivery in early 2026. At the same time, the state-run company continues to buy Russian oil through non-sanctioned entities, with five cargoes recently acquired. IOC’s approach differs from other Indian refiners, such as Reliance Industries, which are reducing Russian purchases following US sanctions on Rosneft and Lukoil. The reshuffling of oil trading is expected to benefit tankers, particularly VLCCs, with charter rates reaching levels not seen since 2020, exemplified by a $167,000-per-day fixture for a Middle East-to-India voyage. Russian exports to India reached nearly 2 million bpd last week, though volumes are projected to drop to 910,000 bpd this week and 662,000 bpd next week.

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Russia-Backed Nayara Energy Boosts Refinery Runs to 90% Despite Sanctions Pressure

Russia-backed Nayara Energy has increased crude processing at its 400,000-bpd Vadinar refinery to 90–93% capacity, recovering from a slump to 70–80% earlier this year following EU sanctions. The sanctions had curtailed exports and caused suppliers such as Iraq and Saudi Arabia to suspend crude sales, down from pre-sanction levels of 104% utilization. Nayara, majority-owned by Rosneft with a 49.13% stake, is now operating almost entirely on Russian oil arranged and sold through traders linked to Rosneft. The refiner has boosted domestic fuel sales, including to Hindustan Petroleum Corp, to offset lost export markets. While most Indian refiners paused Russian purchases after new U.S. sanctions, Nayara continues to import Russian crude via non-sanctioned intermediaries, maintaining operations through alternative payment mechanisms.

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Turkey Increases Non-Russian Oil Imports as Sanctions Pressure Mounts

Turkey’s top refiners, SOCAR’s STAR and Tupras, are sharply increasing purchases of non-Russian crude following new Western sanctions on Moscow, sources told Reuters. STAR refinery has bought four cargoes from Iraq, Kazakhstan, and other suppliers for December—equivalent to 77,000–129,000 bpd—reducing its reliance on Russian oil, which made up nearly 210,000 bpd of intake in recent months. Tupras is also boosting purchases of Iraqi and other Urals-quality grades and plans to phase out Russian crude at one refinery to maintain fuel exports to Europe. Turkey’s total crude imports averaged 669,000 bpd from January to October, with 317,000 bpd (47%) from Russia, compared to 580,000 bpd and 333,000 bpd from Russia a year earlier. The shift mirrors moves by Indian refiners as Western restrictions increasingly squeeze Russia’s oil trade.

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Cosco Shipping Places $1.7 Billion Orders for VLCCs and Bulk Carriers

Cosco Shipping Development, a subsidiary of China’s state-owned Cosco Shipping, has ordered six methanol- and LNG-ready VLCCs and 23 kamsarmax bulk carriers in a $1.74 billion newbuilding spree. The VLCCs, contracted from Dalian Shipbuilding Industry Co, will be delivered between April 2027 and November 2028 and are fixed out under long-term charters of more than 20 years to Cosco Shipping Energy Transportation (CSET). The 23 bulk carriers will be built by Cosco Heavy Industry Dalian and delivered between May 2027 and the end of 2028, with long-term charters to Cosco Shipping Bulk. Funding for the VLCCs will combine 25% internal resources with bank and external debt, while the annual charter rates for the bulk carriers are capped at about $3.36 million each. The orders are part of Cosco’s broader strategy to expand its fleet and transform its subsidiaries into a world-class shipping company, joining over 100 newbuildings worth more than $10 billion ordered this year.

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George Economou’s TMS Group Eyes VLCC Newbuilds at Hengli Shipyard

Greek shipowner George Economou’s TMS Group is reportedly finalizing an order with China’s Hengli Shipbuilding for up to four 306,000-dwt VLCCs, with deliveries expected between 2027 and 2028. It is unclear whether all four vessels are firm or include optional ships, but the deal marks TMS’ return to VLCC orders since a 2017 contract that did not materialize. Hengli is a favored shipyard in China due to its large capacity and early delivery slots, and has recently secured VLCC orders from other European owners like Seatankers and Dynacom. Brokers estimate the newbuild cost for TMS’ VLCCs around $126 million per vessel, slightly above recent European orders at Hengli. TMS Group already operates a diverse fleet of tankers, bulkers, and gas carriers, with 44 newbuildings currently on order across South Korean and Chinese shipyards.

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Okeanis VLCC Taps Spot Market Surge After Switching to Clean Cargo

Greece’s Okeanis Eco Tankers is set to benefit from a VLCC rate spike after switching the 300,300-dwt Nissos Nikouria to carry a clean cargo of gasoil and diesel from the Middle East to Europe for TotalEnergies. The tanker departed Dubai on 8 October and is due in Fos-sur-Mer, France, on 11 November, with its next charter expected to coincide with soaring crude spot rates exceeding $100,000 per day. Okeanis has been specializing in cleaning its vessels for fuel trades, allowing charterers to avoid the risk and enabling the company to offer unique spot opportunities. CEO Aristidis Alafouzos highlighted that the strategy works best when clean markets are strong and VLCC rates are moderate, creating profitable arbitrage opportunities. The approach has strengthened trust with counterparties and positioned Okeanis as one of the few owners capable of combining VLCC capacity with clean cargo flexibility.