Oil Rises on Fuel Market Tightness Despite Crude Surplus Outlook

Oil prices rose modestly on Monday, with Brent up 0.7% to $64.06 and WTI up 0.6% to $60.13, as tight fuel markets offset worries about a looming crude surplus. U.S. gasoline and diesel futures gained around 1%, lifted by refinery outages, Ukrainian drone strikes on Russian refineries, and potential fuel supply disruptions from new U.S. sanctions. Analysts noted that refinery issues in the U.S. and Lukoil’s halted operations in Iraq and Russia have intensified concerns over refined product shortages. However, gains were capped by expectations of rising crude inventories and OPEC+ output increases, which could push the market into a supply surplus in coming months. Investor optimism also grew as progress toward ending the U.S. government shutdown boosted broader risk appetite in financial markets.

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Lukoil Halts Iraq Operations Under U.S. Sanctions, Faces Refinery Seizure in Bulgaria

Russian oil major Lukoil has declared force majeure at its West Qurna-2 oil field in Iraq, citing U.S. sanctions that have crippled its international operations. The field, producing about 480,000 bpd and accounting for 9% of Iraq’s total output, is Lukoil’s most valuable foreign asset, but could be shut down and abandoned if sanctions persist for six months. Iraq’s state oil firm SOMO has halted all cash and crude payments, cancelling 4 million barrels of crude allocated for November and suspending loadings of three cargoes linked to Lukoil. Meanwhile, Bulgaria is preparing to seize Lukoil’s Burgas refinery, after passing legal amendments to take control and potentially sell the facility. Lukoil has also terminated all non-Russian foreign staff at West Qurna-2 as it seeks legal protection under force majeure provisions.

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India Buys 5 Million Barrels from U.S. and Middle East Amid Russian Sanctions Pressure

India’s state refiners HPCL and MRPL have purchased a combined 5 million barrels of crude oil from the spot market as they seek alternatives to Russian supplies impacted by U.S. sanctions. HPCL bought 2 million barrels each of U.S. WTI and Abu Dhabi’s Murban crude for January delivery, while MRPL secured 1 million barrels of Basra Medium crude for early January. The purchases come after U.S. President Donald Trump imposed sanctions on Russia’s top oil producers Rosneft and Lukoil, intensifying supply challenges for India. Both HPCL and MRPL have paused imports of Russian oil in recent months due to heightened risks and payment complications. The move underscores India’s strategic shift toward diversifying crude sources from the U.S. and Middle East to ensure stable supplies.

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PetroChina to Shut Yunnan Refinery for Two-Month Overhaul from November 2025

PetroChina announced it will shut its Yunnan petrochemical plant for a major maintenance overhaul from November 15, 2025, to January 15, 2026. The comprehensive maintenance will involve about 23,000 tasks to enhance operational safety and efficiency. The refinery, with a 13 million metric ton annual crude capacity, mainly supplies gasoline, diesel, and jet fuel to Southwestern China and Southeast Asia. Since starting operations in 2017, it has processed 83 million tons of crude, including 11.56 million tons in 2024. PetroChina said the timing of the shutdown was set to ensure safe and reliable operations once the plant resumes production.

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VLCC Charter Rates Surge to $65,000 as Owners and Charterers Brace for Market Showdown

VLCC period charter rates have jumped sharply amid strong spot market earnings, with modern eco VLCCs reaching $65,000 per day and non-eco units hitting $54,000, according to Braemar. Notable fixtures include Oak Maritime’s Maxim extended by CNR at $57,000/day and Sinokor Maritime’s renewal of Gem No 1 for $51,000/day. Indian Oil also renewed two older tankers for around $40,000–$41,000/day. Brokers said activity has picked up, with owners seeking higher short-term rates and optimism building ahead of Bahri Week in Dubai, where sentiment contrasts sharply with last year’s gloom. While spot VLCC rates remain above $100,000/day, HSBC analysts warned that OPEC+’s Q1 2026 output pause could pressure rates early next year despite strong near-term fundamentals.

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Tanker Orderbook Surges Amid Market Boom, but Long-Term Oil Demand Remains a Risk

The tanker market has seen a spike in newbuild orders, pushing the global tanker orderbook to about 15% of the fleet, driven by recent VLCC orders from China Cosco Shipping and Eastern Pacific. Poten & Partners warns owners must consider long-term oil demand, which is expected to grow slowly due to transport electrification and a tougher macroeconomic environment. VLCC orders have surged from 12 in mid-2023 to 128 in November 2025, while Suezmax and aframax orders have remained steady. Historical comparisons show the current orderbook is high but not unprecedented, with past spikes in the 1990s, late 2000s, and 2015–2016 driven by fleet transitions, OPEC production increases, and floating storage needs. Analysts caution that excessive fleet growth may outpace ton-mile demand, creating risks for long-term profitability despite short-term market catalysts.

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US Ports Brace for ‘Goods Recession’ as Import Volumes Slow Ahead of 2026

US container imports are slowing, with October volumes down 0.1% month-on-month and 7.5% year-on-year, signaling caution among importers amid tariff uncertainty and a cloudy consumer outlook. Analysts and port data predict declines of 14–18% for November and December, with year-end volumes likely marking the slowest finish since March 2023. The slowdown is partly driven by trade policy volatility, including uncertainty over Trump-era tariffs on Chinese goods, which has pushed some importers to front-load shipments earlier in the year. While some sectors like electronics are supported by AI-related demand, declines are seen in winter clothing, toys, furniture, and agricultural exports like soybeans. Overall, the US is experiencing what industry experts are calling a “goods recession,” reflecting a structural shift in import activity rather than temporary fluctuations.