Oil Prices Slip as Peace Hopes Fade and Oversupply Fears Grow

Oil prices fell about 1% on Tuesday, with Brent settling at $62.45 and WTI at $58.64, as traders balanced fading optimism over Russia-Ukraine peace talks with growing concerns about oversupply. Market sentiment initially improved after reports that Putin met with U.S. envoy Steve Witkoff and Jared Kushner, but Putin’s warnings to Europe and threats toward Ukraine signaled peace is still distant. Mixed rhetoric on Russia’s oil exports—especially to India—added volatility, while recent Ukrainian drone attacks on Russian oil infrastructure and U.S.–Venezuela tensions helped limit deeper price declines. Supply pressure also grew after U.S. API data showed significant builds in crude, gasoline, and distillate inventories. OPEC+ maintained its output policy for Q1 2026, but concerns about a potential supply glut continue to weigh on the market.

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Fourth Russia-Linked Tanker Hit in Escalating Black Sea Attacks

A fourth Russia-connected tanker, the Midvolga-2, was attacked by drones in the Black Sea on Tuesday, marking at least nine tanker incidents since December and signaling a sharp escalation in strikes on Moscow-associated shipping. The vessel, carrying sunflower oil from Russia to Georgia, was hit about 80 miles off Turkey’s northern coast, though its 13 crew remained unharmed and it continued toward Sinop under its own power. Turkish officials confirmed the drone strike, which followed two attacks last week that a source attributed to Ukraine amid an intensifying energy confrontation between the two nations. The surge in maritime attacks comes as Ukraine also targets Russian oil refineries and export infrastructure, while Turkey warns that the “alarming” incidents threaten regional navigational safety. The escalation coincides with new diplomatic efforts, with US envoy Steve Witkoff heading to Russia for discussions on a fresh peace proposal.

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EU Nears Landmark Agreement to Permanently Ban Russian Fossil Fuel Imports

The EU is close to finalizing a regulation under RePowerEU that would legally ban all Russian gas imports, with member states supporting a 2027 deadline while Parliament pushes for 2026. The measure is designed to be permanent and will stand regardless of any future Russia-Ukraine peace deal, reinforcing the bloc’s long-term break from its former top energy supplier. Europe still receives 15% of its LNG from Russia—worth €500–700 million per month—but growing global gas surplus expected from late 2025 has strengthened political backing for the phaseout. Proposed compromises would prohibit new short-term contracts after June 17, 2025, and ban LNG and pipeline gas under long-term deals between early 2027 and April 2027, with exemptions for Hungary and Slovakia until end-2027. The Parliament also seeks an outright ban on Russian oil and petroleum products from 2026, though member states have not yet agreed on a fixed end date.

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CPC Rushes to Restore Black Sea Export Capacity After Drone Strike Damages Moorings

The Caspian Pipeline Consortium (CPC) is expediting repairs on its SPM-3 mooring, now expected to return to service within seven days, far earlier than the original two-month schedule, after a Ukrainian drone attack severely damaged SPM-2. With SPM-2 likely to require months of repairs or replacement, CPC has resumed limited exports using a single operational mooring, operating at just over 50% of normal capacity. Once SPM-3 returns, the consortium will have two of three moorings online, enabling a full restoration of export flows. CPC Blend exports were planned to rise to 1.7 million bpd in December, up from 1.45 million bpd in November, though this target may be cut depending on repair progress. Suppliers warn that delays could force production curtailments unless the second mooring is reinstated quickly.

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Putin’s India Visit Aims to Revive Energy and Defence Ties Amid U.S. Pressure

Russian President Vladimir Putin begins a two-day visit to India seeking to boost sales of oil, missile systems, and fighter jets, as bilateral energy and defence ties have weakened under tightening U.S. sanctions. India’s imports of Russian crude are expected to hit a three-year low, even as its purchases of U.S. oil and gas rise and President Trump recently doubled tariffs on Indian goods to 50% in retaliation for Russian crude purchases. Putin’s delegation includes top executives from Rosneft, Gazprom Neft, Sberbank, and Rosoboronexport, with discussions spanning defence, shipping, agriculture, nuclear energy, and a potential free trade agreement with the Eurasian Economic Union. India seeks restoration of its 20% stake in Sakhalin-1, while Russia wants India’s help securing technical equipment restricted by sanctions.

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Russia’s Diesel Exports Rise in November Despite Sanctions and Drone Strikes

Russia’s seaborne diesel and gasoil exports rose 3% in November to 2.37 million metric tons, defying new U.S. sanctions and infrastructure damage from Ukrainian drone attacks. Shipments of ultra-low-sulphur diesel from Primorsk surged nearly 40% as major refiners completed seasonal and unplanned maintenance, while exports from southern ports dropped sharply following strikes on facilities in Tuapse and Novorossiysk. Despite sanctions on Rosneft and Lukoil, overall diesel flows remained stable, with Turkey staying the top buyer at 1.06 million tons, up 10% from October, and Brazil boosting imports to 190,000 tons. Ship-to-ship transfers near Malta and Port Said increased to nearly 0.5 million tons, and about 270,000 tons of diesel departed Russia without declared discharge ports, leaving their final destinations unclear.

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Exxon Seeks to Acquire Lukoil’s $1.6 B Stake in Iraq’s West Qurna 2 Oilfield

Exxon Mobil has approached Iraq’s oil ministry to express interest in purchasing Lukoil’s 75% stake in the West Qurna 2 oilfield, valued at around $1.6 billion. Lukoil is attempting to sell its foreign assets after U.S. sanctions, and the U.S. Treasury has allowed talks with potential buyers until December 13. West Qurna 2 produces about 470,000 barrels per day, representing 9% of Iraq’s total oil output and 0.5% of global supply, making it one of the world’s largest fields. Iraqi officials say Exxon is the “preferred option” to take over due to its capacity and experience, following the company’s recent return to Iraq through new cooperation agreements. Iraq has invited multiple U.S. companies to negotiate for the field’s operation, which will be awarded via competitive bidding.

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Qatar Set to Enter Competitive LNG Trading Era with Golden Pass Volumes

QatarEnergy is preparing to enter large-scale LNG trading as its Golden Pass LNG project in the US ramps up, giving it nearly 200 flexible cargoes and up to 13 mtpa of non-Qatari volumes to market. Analysts say Qatar will need to become far more “competitive and agile” as it shifts from traditional long-term, fixed-destination contracts to a more dynamic market dominated by shorter terms, flexible deliveries and increased seller competition. By the early 2030s, Qatar’s LNG output is expected to nearly double from today’s 80 mtpa, but around 30% of its capacity could be uncontracted by decade’s end, pushing it deeper into spot and short-term trading. Golden Pass volumes appear strategically aligned with QatarEnergy’s UK South Hook terminal capacity, likely serving as a marketing backstop into Europe. As global LNG shifts toward destination-free contracts and more volatile demand patterns, Qatar will also face challenges in logistics, shipping, and expanding buyer infrastructure—particularly in emerging Asian markets.

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Hanwha Ocean Secures Another Major VLCC Order as Tanker Market Surges

Hanwha Ocean has secured a new contract worth KRW 375.3bn ($255.5m) to build two VLCCs for an undisclosed Oceania-based owner, with delivery slated for 31 December 2028. This marks the shipyard’s second VLCC order in two weeks and lifts its total orders this year to $7.96bn, close to last year’s $8.98bn. The new deal is Hanwha’s third-largest order of 2025 and follows a KRW 757.7bn contract last week from Maran Tankers for four conventionally fueled VLCCs. The order momentum aligns with exceptionally strong tanker markets, where VLCC charter rates recently exceeded $100,000 per day. Despite a slight dip, the Baltic Exchange’s VLCC time-charter equivalent remains elevated at $115,143 per day, near year-to-date highs.

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Idemitsu’s 2028 VLCC Newbuilds to Become Largest Tankers Equipped with Rotor Sail Wind Systems

Idemitsu Tankers is adding large wind-assisted rotor sails to two VLCC newbuildings under construction at Japan Marine United and Nihon Shipyard for delivery in 2028, making them the largest tankers to feature this technology. The vessels will each carry Norsepower-supplied Flettner rotors measuring 35 meters in height and 5 meters in diameter. Idemitsu already operates 23 vessels with rotor sails, including smaller tankers and a 325,000-dwt VLOC, while Japan has become Norsepower’s single largest market. Competitor Anemoi Marine has also installed wind systems on several VLOCs, including the 400,000-dwt NSU Tubarao, which has five rotors. The adoption of Flettner rotors and other wind-assist technologies continues to grow as they reduce fuel consumption, voyage costs, and CO₂ emissions by providing additional forward thrust.

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Green Methanol Adoption Stalls Amid High Costs and Limited Supply, DNV Reports

DNV’s latest analysis finds that although over 450 vessels are capable of running on methanol, most are still operating on fuel oil or grey methanol because green methanol remains scarce and roughly three times more expensive than marine gas oil. Despite strong technical performance — with methanol engines accumulating over 600,000 operating hours — the fuel’s rollout is constrained by insufficient production, with only 2.2 million tonnes of green methanol available annually versus a projected demand of 60 million tonnes by 2040. Bunkering infrastructure also lags, though 17 methanol bunker vessels are already in service or on order. If all announced and committed production projects proceed, green methanol supply could rise to between 14 million and 42 million tonnes, potentially meeting much of future shipping demand. With high prices and tight supply persisting, some owners such as Maersk are exploring methanol–ethanol blends, supported by engine makers who confirm ethanol compatibility with minor modifications.