Oil Prices Hold Steady as OPEC+ Plans Output Pause Amid Surplus Concerns

Oil prices were largely unchanged Monday as traders balanced OPEC+’s small December output increase with its plan to pause production hikes in early 2026 and growing worries over a global supply glut. Brent crude settled at $64.89 a barrel and WTI at $61.05, supported by the planned production freeze and offset by weak Asian factory data. The IEA forecasts a surplus of up to 4 million bpd next year, though OPEC expects supply and demand to balance. Analysts noted that U.S. sanctions on Russian producers and attacks on infrastructure keep supply risks elevated, while China’s slowing demand contrasts with India’s continued growth. A strong U.S. dollar and signs of weak U.S. manufacturing added pressure, as markets await further cues from the Federal Reserve’s next policy meeting.

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Russia Secures OPEC+ Output Pause as Sanctions Limit Exports, Saudis Agree Amid Glut Fears

OPEC+ agreed on Sunday to pause oil output increases from January to March 2026, following a push from Russia, which is struggling to expand exports due to new U.S., EU, and UK sanctions, according to four sources. Russia’s proposal faced no opposition from Saudi Arabia, which supported the move given seasonal demand weakness in the first quarter and growing fears of a 2026 supply glut. Since April, OPEC+ has raised production targets by about 2.9 million bpd — roughly 2.7% of global supply — but actual gains have been limited as most producers are near maximum capacity. The pause will allow the group to assess the sanctions’ impact on Russian output and broader market conditions. While OPEC forecasts a balanced market next year, the International Energy Agency projects a surplus of up to 4 million bpd, heightening caution within the alliance.

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Venezuelan Oil Exports Drop 26% in October Amid Lower Stocks and Imports

Venezuela’s oil exports fell 26% to 808,000 bpd in October as lower inventories and reduced imports of diluents curtailed its ability to produce exportable crude, according to PDVSA data. The decline followed a five-year high in September, when output reached 1.1 million bpd supported by steady imports of light crude and naphtha, mostly from Russia. Imports dropped to 41,000 bpd in September and 73,500 bpd in October, well below the 105,000–110,000 bpd average earlier this year, depleting PDVSA’s blending stocks. Of total exports, 80% (about 663,000 bpd) went to China via intermediaries, while 128,000 bpd were sent to the U.S. through Chevron and 11,000 bpd to Cuba. Despite limited U.S. sanctions relief allowing Chevron to export from Venezuela, restrictions still cap its shipments to roughly half of its joint venture output.

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Sinopec in Talks to Merge with China’s Top Aviation Fuel Distributor

China’s biggest oil refiner, Sinopec Group, is in talks to merge with China National Aviation Fuel Group (CNAF), the country’s main jet fuel supplier, in a deal initiated by Beijing, according to sources. The discussions are ongoing with no set timeline or guarantee of completion. CNAF manages China’s airport fueling network and partially owns China Aviation Oil (Singapore), which handles jet fuel trading and imports. If the merger proceeds, Sinopec would absorb CNAF’s assets and operations, creating a more integrated energy and aviation fuel supply chain. The move comes as China’s jet fuel demand surges to over 40 million tons in 2025, reflecting the post-pandemic recovery in air travel.

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Exxon Eyes More Refinery Upgrades to Boost High-Value Product Output

Exxon Mobil is planning additional refinery upgrades after launching four new refining and chemical projects in 2025, as part of CEO Darren Woods’ strategy to convert low-value feedstocks into higher-priced products. The company’s refining profit jumped 41% year-over-year to $1.8 billion, while chemical earnings fell 42% to $515 million in the third quarter. Recent projects include new facilities at Singapore, Canada’s Strathcona refinery (renewable diesel), and the UK’s Fawley refinery (low-sulfur diesel). Exxon also began operating a major petrochemical complex in China, expanding its global footprint despite industry margin pressure. Executives said two remaining projects—advanced plastics recycling and thermoset resin manufacturing—are on track for completion by year-end, as Exxon focuses on long-term, high-return investments.

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LR2 Product Tankers May Shift to Crude Trades as Aframax Earnings Outpace Clean Market

Clarksons Securities said some LR2 product tankers may switch to dirty (crude) trades as earnings remain far below those of comparable aframax crude carriers. LR2 spot rates rose 13% last week to $35,000 per day, still well under the $62,000 per day earned by aframaxes. Analysts attributed the lag to extensive refinery maintenance, with global refinery runs falling from 85.6 million bpd in July to 80 million bpd in October, including 800,000 bpd of downtime in the Middle East. However, tightening diesel supplies — worsened by 1 million bpd of Russian refinery outages due to drone attacks — are boosting long-haul trade demand from Asia to Europe and supporting MR tanker activity. Clarksons expects product tankers to benefit from rising diesel cracks and finish the year strongly, with firm sentiment in both the LR1 and LR2 markets.

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U.S. Sets Global Record With 10 Million Tonnes of LNG Exports in a Single Month

The United States became the first country ever to export 10.1 million metric tonnes (mmt) of LNG in a single month, breaking its previous record of 9.1 mmt in September, according to LSEG data. The surge was driven by Venture Global’s Plaquemines plant (2.2 mmt) and Cheniere’s Corpus Christi facility (1.6 mmt), with Cheniere’s total exports reaching 4.2 mmt, or 42% of the U.S. total. Together, Venture Global and Cheniere accounted for 72% of total U.S. LNG exports in October. Europe remained the top destination, taking 6.9 mmt (69%), while Asia received 1.96 mmt and Latin America 0.57 mmt. Benchmark gas prices averaged $10.88 per MMBtu in Europe and $11.11 in Asia, narrowing the price gap and keeping most U.S. cargoes directed toward Europe.