Oil Rises $1 as U.S. Sanctions on Russia Offset Oversupply Concerns

Oil prices rose on Tuesday, with Brent gaining $1.10 (1.72%) to $65.16 a barrel and WTI climbing 91 cents (1.51%) to $61.04, as traders weighed U.S. sanctions on Russian oil against oversupply risks. Russia’s Lukoil declared force majeure at its Iraqi oilfield — the biggest disruption yet from last month’s sanctions — while restricted Russian fuel exports supported prices despite a global crude glut. Middle Eastern producers including Saudi Arabia, Iraq, and Kuwait are boosting oil shipments to India in December as refiners seek alternatives to Russian barrels. Optimism over a potential end to the U.S. government shutdown also lifted demand expectations. However, analysts warned that OPEC+’s addition of 2 million bpd since April, along with plans to lift another 1 million bpd after a first-quarter pause, could maintain downward pressure on prices.

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Sinopec’s Luoyang Refinery Shuts 200,000-bpd Crude Units Following U.S. Sanctions Impact

Sinopec’s Luoyang Petrochemical refinery has shut both of its crude distillation units, totaling 200,000 barrels per day, for maintenance until the end of November, sources told Reuters. The shutdown, which began around late October, follows U.S. sanctions imposed in early October on a key eastern China terminal handling about one-fifth of Sinopec’s crude imports. The sanctions disrupted crude flows and pipeline-linked operations at several subsidiary refineries, with Luoyang among the hardest hit. Sources said Sinopec likely used the opportunity to conduct maintenance while adjusting crude delivery logistics. The company has not yet commented on the matter.

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China’s Yanchang Seeks Non-Russian Oil as Sanctions Disrupt Refining Operations

Chinese refiner Yanchang Petroleum has issued a tender for non-Russian crude deliveries between December and mid-February amid growing caution over secondary Western sanctions. The company, which typically buys one Russian oil shipment per month, is shifting away from grades like ESPO blend and Sokol, trade sources said. Meanwhile, Sinopec’s Luoyang Petrochemical has shut both of its 200,000-bpd crude units for maintenance after U.S. sanctions on an eastern Chinese terminal disrupted crude supplies. The terminal, which handles about one-fifth of Sinopec’s imports, forced supply diversions affecting connected plants. Yanchang, capable of processing 348,000 bpd and holding a 3.6 million-ton annual import quota, usually sources crude via Tianjin port and rail delivery inland.

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Russia Bans 30 Japanese Nationals in Retaliation for Ukraine Sanctions

Russia has barred 30 Japanese individuals, including a Foreign Ministry press official, in retaliation for sanctions Tokyo imposed over Moscow’s war in Ukraine. The affected list also includes journalists and academics, with the entry prohibition described as “indefinite” by the Russian Foreign Ministry. Japan had introduced sanctions in September targeting Russian companies, individuals, and other entities. The measures also included lowering Japan’s cap on Russian seaborne crude imports. The Russian action is part of a broader pattern of reciprocal sanctions between Moscow and Western-aligned nations.

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Russian Oil Exports Hold Steady Despite New U.S. Sanctions

Russia has maintained stable crude oil exports from its main sea ports in early November despite new U.S. sanctions targeting top producers Lukoil and Rosneft, the first such measures under President Trump’s second term. Shipments continue largely as scheduled, with Russian-flagged and shadow fleet tankers moving crude through western ports like Primorsk, Ust-Luga, and Novorossiysk, often bound for India and China via the Suez Canal. November exports of Urals, Siberian Light, and KEBCO grades are averaging about 2.3 million bpd, only slightly down from 2.4 million bpd in October. Transactions with the sanctioned firms are allowed until November 21, after which traders expect volumes to start declining. Analysts note that unsold Russian oil may be redirected to China, where discounts have reached their deepest levels in a year.

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Indian Refiners Shun Russian Oil for December Amid U.S. Pressure and Sanctions

Most major Indian refiners — including Reliance, Bharat Petroleum, Hindustan Petroleum, Mangalore Refinery, and HPCL-Mittal— have halted Russian crude purchases for December as Western sanctions tighten and U.S. trade talks advance. These five companies, which typically handle two-thirds of India’s Russian oil imports, are showing caution after President Trump doubled tariffs on Indian imports to 50% and sanctioned Rosneft and Lukoil. Only Indian Oil Corp. and Nayara Energy continue limited Russian purchases, with IOC buying from non-sanctioned sellers. Russian cargoes are still available at $3–$4 per barrel discounts, but Indian buyers face complex due-diligence hurdles. India, which sourced 36% of its crude from Russia this year, is turning to the U.S. and Middle East instead — IOC has sought 24 million barrels from the Americas, while refiners have secured new supply assurances from Saudi Aramco and ADNOC.

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VLCC Spot Market Sees Multiple Offers as Charterers Exercise Caution

VLCC owners are still seeing strong spot earnings, with eco tankers averaging $100,700 per day, though rates have fallen 7% from Monday as market sentiment shifts toward charterers. Brokers noted that charterers are holding back, with a single market quote attracting 10 offers, reflecting cautious behavior amid softer tonnage fundamentals. Period charter rates remain elevated, with one-year fixes approaching decade highs, as owners try to secure vessels while charterers weigh spot market opportunities. Regional trends are similar in West Africa and the US Gulf, with lighter demand but stable rates due to tight availability in key Atlantic positions.

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Scorpio Tankers Returns to VLCC Market with Two Newbuild Orders

Scorpio Tankers is re-entering the VLCC segment by signing letters of intent to build two vessels with South Korea’s Hanwha Ocean for $128 million each, with deliveries expected in late 2028. This marks the company’s second venture into VLCC ownership, following earlier sales of VLCCs between 2014 and 2015. CEO Emanuele Lauro said the newbuilds reflect the company’s conviction in the crude tanker market and are strategically timed to benefit from future market conditions. Scorpio has also reduced its stake in DHT Holdings, signaling a shift away from purely financial investments in VLCCs. The orders come amid broader VLCC buying activity, pushing the global orderbook to around 15% of the fleet, though analysts caution owners to consider long-term oil demand trends.

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Product Tanker Owners Lock in Lucrative Time Charters Amid Strong Spot Rates

Product tanker owners are increasingly securing vessels on time charters as spot market rates for MR tankers rise sharply. Atlantic MR spot earnings surged to $30,200 per day, up 19% from the previous Friday, while Pacific rates held steady at $22,000 per day. Recent deals include Monjasa fixing its 50,000-dwt Monjasa Master to Trafigura at $21,000 per day, and Ardmore Shipping locking two MRs with BP and Repsol for around $21,250 per day. Finnish company Neste took Torm’s ice-class 1A 49,000-dwt Torm Lilly for three years at $22,800 per day, highlighting strong demand for premium vessels. Market analysts note the trend reflects both elevated spot rates and continued interest in high-value clean and dirty product segments, with some uncertainty over longer-term Chinese tonnage demand.

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Taiwan Evacuates Over 3,000 Ahead of Typhoon Fung-wong Landfall

Taiwan evacuated more than 3,000 people as Typhoon Fung-wong approaches, issuing a land warning for the island’s southwestern coast near Kaohsiung. The storm, weakened from its destructive passage through the Philippines where it killed 18, is expected to bring heavy rains to Taiwan’s mountainous east coast. Authorities closed schools and offices in Hualien and Yilan counties, and 66 mostly domestic flights were canceled. President Lai Ching-te and local officials urged residents to avoid mountains, coastal areas, and other risky zones. The typhoon is forecast to cross southern Taiwan before entering the Pacific along the sparsely populated eastern counties.