Oil Prices Edge Higher as U.S.–Russia Peace Talks Stall

Oil prices rose slightly on Wednesday, with Brent at $62.67 and WTI at $58.95, after U.S.–Russia peace talks failed to achieve a breakthrough that might have eased sanctions on Moscow’s oil sector. Gains were limited as U.S. crude inventories increased by 574,000 barrels, gasoline stocks surged by 4.52 million barrels, and distillates rose by 2.1 million barrels, all exceeding expectations and reinforcing oversupply concerns. Russia and the U.S. ended a five-hour meeting with no compromise, leaving uncertainty over whether sanctions on Rosneft and Lukoil could eventually be lifted. Geopolitical risks remain elevated as Ukraine continues targeting Russian oil infrastructure.

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EU Sets 2027 Deadline to End Russian Gas Imports as Hungary and Slovakia Plan Legal Fights

The European Union agreed to permanently halt Russian gas imports by late 2027, phasing out LNG by end-2026 and pipeline gas by September 2027 as part of unwinding its historic dependence on Moscow. Hungary and Slovakia strongly oppose the move, with Hungary pledging to challenge the legislation in the EU Court of Justice, arguing the measure circumvents the unanimity required for sanctions. Russia condemned the decision, warning Europe will face higher prices and reduced competitiveness. Russian gas now accounts for 12% of EU imports, down sharply from 45% before the 2022 invasion of Ukraine, though several countries — including Hungary, France, and Belgium — still receive supplies. The EU will also phase out remaining Russian oil imports by end-2027 and require member states to submit diversification plans by March 1, 2026.

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Global Seaborne Oil Shipments Fall as Black Sea and U.S. Gulf Exports Drop Sharply

Global seaborne oil flows dropped by 850,000 bpd in November to 41.4 million bpd, driven mainly by steep declines from the Black Sea and the U.S. Gulf. Ukrainian drone attacks on Russian infrastructure caused major disruptions, with the Novorossiysk ports and the damaged CPC terminal together reducing exports by 343,000 bpd. The U.S. Gulf saw an even larger decline, with shipments falling 620,000 bpd from the prior month. Iraq also posted a drop of 162,000 bpd, adding to the overall slowdown. Meanwhile, the UAE, Venezuela, and Kuwait each increased shipments by more than 100,000 bpd, partially offsetting the global decline.

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U.S. Crude and Fuel Stocks Rise as Refiners Boost Runs, Pressuring Prices

U.S. crude inventories increased by 574,000 barrels last week to 427.5 million barrels, contrary to expectations for a draw, while Cushing stocks fell by 457,000 barrels, according to the EIA. Refiners sharply ramped up activity, with crude runs rising by 433,000 bpd and utilization climbing to 94.1%. Gasoline inventories surged by 4.52 million barrels and distillate stocks rose by 2.1 million barrels, both far exceeding analyst forecasts. The broad inventory builds pressured oil, gasoline, and diesel futures, especially as total product supplied—a demand indicator—slipped slightly to 20.189 million bpd. Analysts warn that rising refinery utilization during a period of declining seasonal gasoline demand is likely to keep downward pressure on prices and refining margins.

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Venezuela’s Oil Exports Climb to 921,000 bpd Despite U.S. Pressure and Operational Setbacks

Venezuela’s oil exports reached 921,000 bpd in November, the third-highest level this year, aided by increased use of diluents despite heightened U.S. political and military pressure. A major fire at an oil upgrader reduced PDVSA’s ability to produce upgraded crude, but rising naphtha imports helped maintain export volumes. Total exports were 3% higher than October, though 5% below last year, with China receiving 80% of shipments (about 746,000 bpd). Deliveries to the U.S. via Chevron rose to 150,000 bpd, while Cuba received 24,000 bpd of crude and fuels. Imports of light crude and fuel jumped to 167,000 bpd, and U.S. military activity in the Caribbean did not disrupt Venezuela’s oil flows.

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China’s Independent Refiners Boost Iranian Crude Intake After New Import Quotas

China’s independent refiners, mainly in Shandong, have sharply increased withdrawals of Iranian crude from storage following Beijing’s latest allocation of import quotas late last month. About 20 teapot refiners received 7–8 million tons in the newest quota round, enabling them to process previously purchased barrels that had been sitting in bonded tanks or offshore. Despite the increase, overall teapot demand is expected to stay weak through year-end due to poor refining margins, causing sanctioned crude to keep accumulating on water. Two supertankers carrying Iranian crude discharged this week, including the Ill Gap with ~2 million barrels unloaded at Rizhao. Iranian grades remain deeply discounted — $8–$9/bbl below ICE Brent versus $4 in August — as limited buyers and expanding sanctions on Russia pressure prices lower.

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China’s Oil Demand Expected to Stay Weak Until Mid-2026, Says Hengli

China’s oil demand is projected to remain sluggish until mid-2026, according to Janet Kong, CEO of Hengli Petrochemical International. Kong noted that meaningful improvement is unlikely unless Beijing introduces new policies early next year, as China faces slow economic growth, ongoing trade tensions with the U.S., and rising transport electrification. Even the petrochemical sector — typically a bright spot — is struggling due to overcapacity, adding further pressure on overall consumption. She said demand may grow faster in West-of-Suez markets, such as the U.S. and OECD countries, compared to East-of-Suez regions. Potential boosts could come from higher fuel-export quotas or additional strategic petroleum reserve purchases, but with inventories already elevated, any SPR buying would be policy-driven rather than urgent.

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China’s Petrochemical Expansion Deepens Global Oversupply Concerns

China’s rapid petrochemical expansion — including seven mega-hubs built in the past decade — has made it the world’s largest producer of ethylene and polyethylene, raising fears of a worsening global supply glut. Domestic polyethylene output is expected to surge 18% this year, outpacing a 10% rise in demand and cutting imports by 13%, a major shift for a country that imported nearly 15 million tons last year. Capacity is set to grow another 16% next year, though weak margins and oversupply may delay some projects, including BASF’s Guangdong complex. Prices have slumped, with China’s polyethylene futures dropping 13% this year, while major players such as Sinopec have reported heavy losses in their chemicals units. Rising Chinese exports — including an 88% jump in shipments to Vietnam — are intensifying pressure on high-cost producers in Europe and other regions already struggling with oversupply and higher energy costs.

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Zodiac Maritime Launches $1.6bn Fleet Expansion with First VLCC Order Since 2013

Zodiac Maritime has committed to a major $1.6bn newbuilding program, including its first VLCC order in over a decade, consisting of at least four firm 319,000-dwt VLCCs with options for up to eight. The VLCCs and six 9,000-teu container ships are being ordered at Jiangsu Hantong Ship Heavy Industry, with deliveries starting in 2028. Each container ship is priced at over $100m, and Chinese yards are reported to have raised VLCC prices by 5–10% amid a winter market rally that pushed VLCC spot rates above $100,000 per day. Zodiac chose conventional marine fuel but is paying extra for high-spec energy-saving technologies. This investment accelerates Zodiac’s fleet renewal, adding to the company’s roughly 200-ship fleet and the 17 newbuildings it has already taken delivery of in 2025.

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Oslo Port to Offer Up to 100% Fee Discounts to Promote Emission-Free Shipping

The Port of Oslo will introduce major financial incentives from next year, offering up to a 100% discount on quay fees for ships that sail emission-free in and out of the port. Additional discounts will be given to vessels that use shore power or achieve high environmental scores, while ships that do not adopt green solutions will face higher costs. The initiative supports Oslo’s ambitious goal to cut city emissions by 95% by 2030, with the port targeting an 85% reduction. Oslo has already invested NOK 225m since 2018 in zero-emission infrastructure such as shore power for ferries, cruise ships, bulkers, and container vessels, with more facilities— including tanker shore power—planned. Port officials say these measures aim to make Oslo the world’s most environmentally friendly city port and a pioneer in sustainable sea transport.