Oil Prices Climb 1% on Fed Rate-Cut Bets and Ukraine Peace Uncertainty

Oil prices rose about 1% on Monday, with Brent settling at $63.37 and WTI at $58.84, driven by expectations of a U.S. interest rate cut and lingering uncertainty over a peace deal between Russia and Ukraine. Recent price weakness had been caused by perceived progress in Ukraine–Russia negotiations, but analysts warned that the potential for the war to continue could reintroduce geopolitical risk. U.S. sanctions on Russian oil firms Rosneft and Lukoil are reducing Moscow’s export revenue, though the market remains focused on the peace talks. Federal Reserve signals of possible rate reductions could stimulate economic growth and oil demand, even as German business sentiment shows unexpected weakness. Additional geopolitical factors supporting oil include U.S. sanctions on Venezuela’s Cartel de los Soles and positive discussions between Trump and Xi Jinping, seen as potentially favorable for global energy demand.

___________________________________

Russia’s Oil and Gas Revenue Set to Drop 35% in November

Russian state oil and gas revenue is expected to fall around 35% in November from the same month last year, dropping to 520 billion roubles ($6.59 billion) due to lower oil prices and a stronger rouble. This revenue, which accounts for roughly 25% of Russia’s federal budget, has been a key source of funding for defence and security spending since the Ukraine conflict began. For January–November 2025, the effective price of Russian oil for tax purposes declined to $57.3 per barrel from $68.3 last year, while the rouble strengthened to 81.1 per dollar. U.S. sanctions on Rosneft and Lukoil are further pressuring Moscow’s oil income, likely reducing long-term exports. Despite the decline, President Putin maintains that Russia can survive and prosper without Western support, though the Finance Ministry has revised its 2025 revenue forecast down to 8.65 trillion roubles from the earlier 10.94 trillion.

___________________________________

Russia Offers Deeply Discounted Urals Crude to India After US Sanctions

Russia’s Urals crude is being offered to Indian refiners at a $7 per barrel discount to Dated Brent, the steepest in at least two years, following US sanctions on top producers Rosneft and Lukoil. Most Indian refiners initially avoided cargoes arriving post-sanctions, effectively halting a trade that had expanded since Russia’s 2022 invasion of Ukraine. The lower prices have prompted some refiners to consider buying from non-sanctioned sellers, though only about 20% of offered cargoes are free of blacklisted entities. Before the latest sanctions, Urals traded at roughly a $3 per barrel discount, showing a sharp widening in the differential. Indian buyers have also been sourcing more crude from other regions, including the Middle East, as they adjust to the disruption in Russian supply.

___________________________________

Russia’s Tuapse Port Resumes Fuel Exports After Two-Week Halt

Russia’s Tuapse port on the Black Sea restarted oil product exports last week following a two-week suspension due to Ukrainian drone attacks. The Rosneft-controlled Tuapse refinery also resumed crude processing on November 21, after halting operations temporarily. The Gambia-flagged Sandhya left Tuapse on November 17 with around 30,000 metric tons of gasoil, while the Malawi-flagged Satna loaded a similar volume on November 18. The exported fuel had been refined prior to the processing halt and was stored in refinery tanks. Tuapse refinery, with a processing capacity of 240,000 bpd, produces naphtha, fuel oil, vacuum gasoil, and high-sulphur diesel, most of which is export-oriented.

___________________________________

Unipec Signs Annual Jet Fuel Supply Deal with Lufthansa

China’s state oil trader Unipec, part of Sinopec, has agreed to supply about 60,000 metric tons of jet fuel annually to Lufthansa, supporting operations at airports in Belgium and Germany. Unipec has historically supplied jet fuel across Western Europe and North Africa, with total annual deliveries, including sustainable aviation fuel (SAF), exceeding 5 million metric tons for the fourth consecutive year. This deal is part of Unipec’s ongoing efforts to expand SAF supplies in Europe, which reached 120,000 tons in 2025. Previous term supply agreements have been signed with both Lufthansa and KLM Royal Dutch Airlines. The agreement strengthens Unipec’s position as a key supplier of conventional and sustainable aviation fuels in the European aviation market.

___________________________________

Petrobras to Delay Drilling Contracts for Buzios Amid Global Oil Surplus

Brazil’s state-controlled oil giant Petrobras will likely postpone awarding up to four drilling contracts for its Buzios offshore field until 2026, citing the need for better reservoir data to optimize well placement. Buzios, already producing over 1 million barrels per day, is a central driver of Brazil’s output growth and a contributor to a global crude surplus projected to exceed demand by ~4 million barrels per day in 2026. The delay comes amid easing demand for deepwater drillships as higher costs, weaker oil prices, and competition from cheaper onshore production prompt operators to focus on the most prolific areas. Petrobras has asked contractors to revise their offers by the end of 2025 and is continuously reviewing demand for critical resources to optimize project development. Offshore rig operators, including Valaris Ltd., expect rig activity in Brazil to bottom out this year but rebound in 2026, which could push up lease costs.

___________________________________

VLCC Rates Surge Beyond $140,000/Day as Charterers Scramble for Tonnage

VLCC freight rates from the Middle East Gulf to China hit $143,900 per day, a five-year high outside 2020, driven by tight tonnage and sanctions on Russian and shadow fleet vessels. Charterers faced limited options as available vessels dwindled, forcing competition and pushing some fixtures to over $160,000 per day, such as the 297,000-dwt Skopelos for Indian Oil Corp. Brokers noted that the market’s firmness is geopolitically driven rather than by storage demand, with US sanctions removing around 8% of compliant fleet capacity year-on-year. Activity remained steady under the radar, keeping owners in a strong negotiating position, while charterers may see some relief only as new loading dates for December emerge.

___________________________________

Tanker Market Faces Potential 2026 Oil Glut

Warnings are rising that a global oil glut in 2026 could threaten currently high tanker earnings, with the IEA projecting supply could exceed demand by 4 million barrels per day. Analysts note that oversupply could temporarily boost rates if contango develops, but longer-term it may reduce transportation demand as land-based inventories stabilize. Tanker demand could be cushioned by stockpiling from the US and China, but timing and volumes will be critical. A “Goldilocks scenario” for the industry would be higher-than-expected oil demand coupled with limited new tanker deliveries, as most VLCC and other tanker orders won’t arrive until after 2026. Current spot rates remain robust, with non-eco VLCCs averaging $135,600/day and smaller classes like suezmaxes and aframaxes also seeing strong earnings.

___________________________________

Maran Tankers Ends Four-Year VLCC Drought with Hanwha Ocean Deal

Greece’s Maran Tankers is returning to VLCC orders after four years, signing a deal with Hanwha Ocean for four 320,000-dwt tankers valued at $516 million ($129m each). The new vessels, powered by conventional fuel, are scheduled for delivery by November 2028, marking Maran’s first VLCC order since 2021, when it ordered LNG dual-fuelled ships from Samsung Heavy Industries. This move comes as Maran rebuilds its fleet after selling nine tankers between August 2022 and 2025, including the Maran Antares. Maran currently operates 42 vessels, including 27 VLCCs, 14 suezmaxes, and one aframax, with other newbuildings underway, including shuttle tankers for Petrobras and LNG-capable suezmaxes. Hanwha Ocean has now secured $6.97 billion in orders for 2025, reflecting strong shipyard demand amid a tight tanker market.

___________________________________

Trafigura Expands VLCC Orders to 10 with Latest Chinese Shipyard Deal

Swiss commodities giant Trafigura has increased its VLCC newbuilding orders to 10 vessels at Jiangsu New Hantong Ship Heavy Industry, with the latest two 319,000-dwt tankers scheduled for delivery in September 2029 and March 2030. The company began taking delivery of its VLCCs next year, with additional vessels arriving through 2028, reflecting Trafigura’s confidence in the sector and the need to replace aging fleets amid over 160 VLCCs transporting sanctioned oil. The surge in VLCC orders aligns with a broader industry trend, as 38 VLCCs were ordered since July, up from 12 in the first half of 2025, driven by limited prior investment and positive medium-term prospects. Trafigura has also been active in the secondhand market, acquiring three Dalian-built VLCCs from Huwell Group for $85–103 million each. Beyond crude, Trafigura maintains a diverse fleet, including suezmax tankers, medium gas carriers, and an asphalt carrier, positioning itself for multiple shipping segments.

___________________________________

Rising Crude Rates Boost Product Tankers as Over Half of LR2s Shift to Dirty Trades

The global LR2 fleet is increasingly carrying crude or fuel oil, with 53% now in dirty trades, as strong crude tanker earnings push product tankers into tighter effective capacity. LR2 rates surged nearly 41% over the last month to a fleet-weighted average of $39,200/day, while aframax tankers averaged $54,700/day, up 12% month-on-month. Smaller product tankers also benefitted, with LR1s at $27,400/day (+9.2% week-on-week) and MRs at $35,900/day (+18%), aided by multi-year high refinery margins. The EU ban on Russian crude products starting January is expected to further support product tanker demand and earnings. Analysts note this “LR2 shuffle” reflects a market responding to tight crude tonnage, profitable product trades, and refinery margin dynamics.

___________________________________

Suspicious Approach in Indian Ocean Raises Concerns of New Pirate Activity

A crude tanker reported a suspicious approach in the Indian Ocean, about 470 miles east of Socotra, prompting maritime intelligence firm Diaplous to urge vessels to avoid the area. A dhow towing four skiffs closed to within 1.5 miles of the tanker, with one skiff moving toward the vessel before altering course when the tanker increased speed under armed guard monitoring. While no weapons were observed, the approach resembled pirate tactics, echoing attacks off Somalia earlier this month where pirates tried to hijack four vessels. EU naval forces, including Atalanta, have recently seized dhows used as pirate motherships, with investigations ongoing into another probable dhow seizure near Bereeda, Somalia. Despite the incident, the piracy threat level remains at “low” in the Gulf of Aden and “moderate” near the Horn of Africa.

___________________________________

Singapore to Issue Licences for Methanol Bunkering from 2026

The Maritime and Port Authority of Singapore (MPA) announced that licences to supply methanol as marine fuel will be issued starting January 1, 2026, advancing the city-state’s goal to become a sustainable multi-fuel bunkering hub. Three companies — Global Energy Trading, Golden Island, and PetroChina International Singapore — were selected from 13 applicants based on supply chain reliability, operational readiness, safety systems, and sustainability certification. Licences will be valid for five years until December 31, 2030, allowing licensees to develop capabilities, strengthen supply chains, and support initial market investments. The move follows a call for applications launched in March 2025 and marks a key step toward establishing methanol bunkering at scale in the world’s largest bunker port. The MPA will continue reviewing the licensing framework to incorporate operational experience, technological developments, and evolving international standards.