Oil Slips as Russia Restarts Novorossiysk Loadings, but Geopolitical Risks Persist

Oil prices eased slightly on Monday after Russia resumed crude loadings at the Novorossiysk export hub, which had been shut for two days due to a Ukrainian attack. Brent settled at $64.20 and WTI at $59.91, retreating from Friday’s sharp gains caused by the temporary disruption of 2% of global supply. Despite the resumption, markets remain on edge as Ukraine continues striking Russian refineries, while Western sanctions on Lukoil and Rosneft add further uncertainty to future crude flows. Analysts note that investors are cautious about taking short positions due to elevated geopolitical risks, even as OPEC+ raises output and forecasts show a persistent global surplus through 2026. Banks such as UBS see near-term price softness but expect firmer prices in late 2026, while Goldman Sachs predicts continued declines driven by a production surge.

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Russian Urals Crude Sinks to 2½-Year Low Ahead of US Sanctions on Rosneft and Lukoil

Russia’s flagship Urals crude price collapsed to $36.61 per barrel, the lowest since March 2023, just days before new US sanctions on Rosneft and Lukoil take effect. The sanctions — announced Oct. 22 with a Nov. 21 wind-down deadline — have already caused buyers in China, India, and Turkey to pause purchases and seek alternative supplies. As a result, Urals crude is trading at a record-deep discount of $23.52 to Brent from Black Sea and Baltic ports, the widest spread since June 2023. The crash threatens the finances of Russian oil companies and cuts into government tax revenue, which funds roughly 25% of Russia’s state budget. Even after delivery to China and India, Urals still trades several dollars below Brent, underscoring the market’s caution due to the risk of secondary sanctions.

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Chevron Weighs Select Lukoil Asset Purchases as U.S. Clears Talks

Chevron is exploring the potential purchase of select overseas assets from sanctioned Russian oil company Lukoil after the U.S. Treasury granted clearance for negotiations. Lukoil’s international portfolio—valued at $20–22 billion and responsible for about 0.5% of global oil output—includes refineries in Europe, fuel stations worldwide, and stakes in major fields in Kazakhstan, Iraq, Mexico, Nigeria, and others. Chevron is interested only in assets where it already has operational overlap, such as Kazakhstan’s Karachaganak (13.5%) and Tengiz (5%) fields and Nigeria’s offshore OML-140, which Chevron operates. Other potential buyers include U.S. private equity firm Carlyle, as Washington’s latest sanctions on Lukoil and Rosneft aim to pressure Moscow over Ukraine. Some Lukoil assets face additional complications, such as Iraq seeking a six-month U.S. waiver to allow more time for Lukoil to sell its stake in the West Qurna 2 oil project.

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India’s Trade Deficit Hits Record $41.7 Billion as US Export Slump Deepens

India’s trade deficit widened to a record $41.68 billion in October, driven by a second consecutive month of falling exports to the US after President Trump’s 50% tariffs. Exports fell nearly 12% year-on-year, with shipments to the US dropping 8.6%, hitting labor-intensive sectors like textiles, leather, footwear, and jewelry the hardest. Imports surged 16%, with gold imports nearly tripling to $14.7 billion amid Diwali demand and rising prices, further widening the gap. The Indian government announced $5 billion in relief measures for exporters and is negotiating a potential trade deal with the US to ease tariffs. While state refiners reduced Russian oil purchases, India signed its first long-term deal to import LPG from the US, aiming to balance trade flows.

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India Sends First Jet Fuel Cargo to U.S. West Coast as California Faces Supply Shortage

India shipped its first-ever jet fuel cargo to the U.S. West Coast, exporting 60,000 metric tons (472,800 barrels) of aviation fuel loaded at Jamnagar for Chevron following supply disruptions at the 285,000 bpd El Segundo refinery after an October fire. The tanker Hafnia Kallang is expected to arrive in Los Angeles in early December, filling part of a regional shortfall that has pushed West Coast jet fuel prices to $10 per barrel above Singapore FOB levels. U.S. West Coast inventories fell to a three-month low of 11.12 million barrels on November 7, and traders expect supply to remain tight until El Segundo completes repairs in early 2026. However, frequent imports from India are considered unlikely, as shipments from Northeast Asia remain cheaper, with freight rates from South Korea holding around $40 per ton. Northeast Asia already supplied about 600,000 tons of jet fuel to the U.S. West Coast last month as arbitrage economics stayed favorable.

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Trans Mountain Expansion Fuels Major Revival in Canada’s Oil Sands

Canada’s oil sands are seeing a strong resurgence as the newly expanded Trans Mountain pipeline opens long-restricted access to Asian markets. With transportation bottlenecks eased, production hit a record high in June and is projected to rise by 300,000–400,000 bpd, reaching 6 million bpd by 2030, according to the Bank of Montreal. Shares of major producers such as Suncor, Imperial Oil, Cenovus, and MEG Energy have outperformed the S&P Global Oil Index by up to three-fold over the past year. Local heavy-oil prices have strengthened, with discounts shrinking to $10–$12 per barrel versus the $30+ gaps seen previously, helping boost US institutional ownership to 65%, up from 40% a decade ago. The sector’s durability is reinforced by oil sands’ slower decline rates and lower sustaining capital needs, making four of North America’s five lowest-cost large-cap oil producers oil-sands-based.

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Oil Traders Skeptical OPEC+ Will Cut Output in 2026 Despite Expected Surplus

Most oil traders and analysts do not expect OPEC+ to cut production in 2026, even amid forecasts of a potential global supply surplus. While the International Energy Agency (IEA) projects a record 4 million bpd excess outside of Covid-era disruptions, only a minority of survey respondents anticipate any output curbs. Saudi Arabia and allies have been reopening halted production to reclaim market share, prioritizing strategic influence over short-term price support. Crude prices have fallen 14% this year, straining OPEC+ member finances, but producers may withstand market weakness if non-OPEC supply growth slows. Analysts say output cuts are only likely in the event of a sharp demand collapse, major price drop, or geopolitical disruptions affecting Iran or Russia.

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VLCC Rates Surge During Bahri Week as Owner Sentiment Strengthens

VLCC spot rates from the Middle East Gulf to Asia jumped to $132,700 per day for modern scrubber-fitted vessels, up 32% from the previous week, amid the Bahri Week gathering in Saudi Arabia. Some fixtures reached up to $145,000 per day, while Shell fixed a 313,500-dwt vessel at $85,000 per day. Sentosa Shipbrokers noted that Bahri Week “didn’t disappoint” for owners, as enquiries and limited available tonnage pushed rates higher. UK broker Gibsons highlighted that activity started quietly but accelerated as more cargoes emerged, driving strong resistance from charterers to negotiate below recent rates. The Middle East trend influenced West African VLCC rates, which also firmed due to shrinking fleet availability and improved owner sentiment.

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Okeanis CEO Predicts Growth in ‘Dark Fleet’ Amid Sanctions and Russian Exports

Okeanis Eco Tankers CEO Aristidis Alafouzos said the dark fleet of tankers handling sanctioned oil will need to expand due to longer voyages, waiting times, and rising crude exports. About 16% of the global fleet is blacklisted, and much of the shadow tonnage is unlikely to return to compliant trades, shrinking the mainstream crude fleet. This reduction in compliant tonnage is expected to tighten supply and support freight rates for modern vessels. Alafouzos noted that Iranian and Russian crude exports remain high, with China likely absorbing much of the additional cargo, which doubles voyage durations. He also highlighted that recent sanctions on Rosneft and Lukoil, along with Ukrainian attacks on Russian refineries, have further restricted compliant shipments, pushing more crude into floating storage.

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Vitol Conducts Pakistan’s First Direct VLSFO Bunkering at MSC Vessel

Vitol’s Singapore-flagged bunker tanker Marine Ista delivered Pakistan’s largest-ever cargo of very low-sulphur fuel oil (VLSFO) directly from Karachi Port Trust Oil Pier. The tanker then refuelled an MSC boxship at Port Qasim, marking the first large-scale production and supply of IMO-compliant VLSFO in Pakistan. The fuel was produced by Cnergyico from the country’s first US crude oil import, following a shipment from Houston last month. Vitol highlighted that this milestone expands Pakistan’s marine fuel capabilities, enabling larger vessels to undertake long east-to-west voyages with locally supplied compliant fuels. Both Vitol and Cnergyico emphasized that this partnership will continue, enhancing Pakistan’s energy and maritime sectors and offering sustainable fuel solutions for global shipping.