Oil Drops 2% as Iraq Restarts Major Field and Ukraine Peace Efforts Advance

Oil prices fell about 2%, with Brent at $62.49 and WTI at $58.88, after Iraq restored output at the 460,000-bpd West Qurna 2 field, which represents 0.5% of global supply. The market had briefly stabilized when reports suggested the field had been shut, but full production has now resumed, easing supply concerns. Traders are also watching slow-moving Ukraine peace talks, which analysts say could swing global oil supply by over 2 million bpd depending on the outcome. Expectations of an 84% chance of a U.S. Federal Reserve rate cut added uncertainty to broader market sentiment. Meanwhile, potential G7/EU maritime service bans on Russian oil, tightened U.S. pressure on Venezuela, and increased Chinese buying of discounted Iranian crude continue to influence global supply dynamics.

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Iraq Restores Output at Major West Qurna 2 Field After Pipeline Leak

Iraq has resumed production at Lukoil’s West Qurna 2 oilfield after a pipeline leak temporarily cut output, according to Iraqi energy officials. The field typically produces about 460,000 bpd, representing 0.5% of global supply and 9% of Iraq’s total output. Lukoil had declared force majeure after being hit with US sanctions targeting Russian oil companies amid the Ukraine conflict. Full operations are expected to be restored within hours as wells are brought back online. Sanctions on Lukoil have attracted interest from potential buyers, including ExxonMobil, Chevron, Carlyle, and Abu Dhabi’s IHC.

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Kazakhstan Redirects Kashagan Crude to China After Damage to CPC Export Terminal

Kazakhstan will send 50,000 metric tons of Kashagan crude directly to China in December, the first such shipment, after a Ukrainian drone strike damaged the CPC Black Sea terminal, which handles about 1% of global oil supply. The attack severely damaged SPM-2, leaving CPC able to use only one of its three single-point moorings, reducing overall exports. The diverted crude will flow through the Atasu–Alashankou pipeline, with CNPC shipping 30,000 tons and Inpex providing 20,000 tons. Kazakhstan confirmed it is working with producers to reroute volumes and expand alternative export channels to avoid disruptions. Deliveries through Atasu–Alashankou currently average 85,000–86,000 tons per month and may increase, as Kazakhstan planned 1.0 million tons via the route in 2025.

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China’s November Crude Imports Hit Highest Daily Rate in Over Two Years

China imported 50.89 million tons of crude oil in November, equal to 12.38 million bpd, the highest daily rate since August 2023 and nearly 5% above October levels. Imports for January–November rose 3.2% year-on-year, even as refinery utilisation at state-owned plants dropped and domestic refined output fell 5.7%. Analysts said seasonal demand weakness was offset by sharply discounted crude from Iran and Russia, improving refining margins and prompting refiners to secure early import quotas for 2026. November seaborne arrivals increased, with Saudi imports up 345,000 bpd to a five-month high and Iranian arrivals up 233,000 bpd to the strongest level since August. Russian arrivals declined by 157,000 bpd, as state refiners reduced purchases and independent refineries faced tight import quotas.

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Sanctioned Chinese Refiner Pushes Ahead With $3.6 Billion Petrochemical Expansion

Despite U.S. sanctions imposed in May for purchasing Iranian oil, China’s Xinhai Chemical is proceeding with a $3.6 billion petrochemicals expansion project at its Cangzhou site. The parent company, Hebei Xinhai Holdings, has committed about half of a planned 50 billion yuan investment to the project’s first phase, scheduled for completion by end-2026. Although sanctions briefly disrupted banking and operations, the refinery resumed Iranian oil imports by using separate corporate entities to bypass restrictions. Other Chinese “teapot” refiners have used similar restructuring tactics to continue business under sanctions. The new complex—set to open in 2027—will include major units such as a hydrocracker, aromatics plant, and TDP facility, producing chemicals like mixed xylene, benzene, MTBE, propylene oxide, and PIB.

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Exxon, Aramco and Samref Plan Major Upgrade and Petrochemical Expansion at Yanbu Refinery

Exxon Mobil, Saudi Aramco, and Samref have signed an agreement to assess a major upgrade of the Samref refinery in Yanbu, aiming to transform it into an integrated petrochemical complex. The planned evaluation includes potential capital investments to expand and diversify production. The upgrade would focus on producing higher-quality, lower-emission distillates and high-performance chemicals, according to Aramco. This initiative follows an earlier memorandum of understanding signed between Aramco and Exxon earlier this year to explore refinery enhancements. Samref is a 50/50 joint venture between Aramco and Mobil Yanbu Refining Company, a wholly owned Exxon subsidiary.

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TotalEnergies Joins Repsol–HitecVision to Form Major North Sea Producer NEO NEXT+

TotalEnergies will merge its UK North Sea oil and gas assets with the Repsol–HitecVision partnership to form NEO NEXT+, with Total holding 47.5%, Repsol 23.625%, and HitecVision 28.875%. This move follows a broader consolidation trend in the ageing North Sea basin, where mergers help companies manage high costs and the UK’s heavy 78% tax burden. The combined entity is expected to produce over 250,000 barrels of oil equivalent per day by 2026 and will include major fields such as Elgin/Franklin, Penguins, Mariner, Shearwater, Culzean, Alwyn North, and Dunbar. Analysts note that while companies gain efficiency and tax advantages by offsetting prior losses, the UK government may see reduced tax revenue as a result. The deal is expected to close in the first half of 2026 and follows Repsol’s earlier merger with NEO Energy nine months ago.

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California Refinery Closures Drive Sharp Decline in Crude Imports and Rise in Product Tanker Demand

California crude imports are slumping as three major refineries—Phillips 66’s Wilmington plant, Valero’s Benicia refinery, and Valero’s smaller Wilmington site—prepare to shut down, together representing 18% of the state’s refining capacity. PADD 5 crude imports dropped to 1.77 million bpd, the lowest since June 2020, and averaged 1.82 million bpd in early November, down 330,000 bpd from last year. With closures accelerating, California’s crude processing capacity is projected to fall from 1.63 million bpd in 2025 to 1.34 million bpd next year, permanently reducing the region’s crude import needs. Lost output includes 150,000 bpd of gasoline and 60,000 bpd of jet fuel, requiring increased imports of refined products—mainly from Asia—boosting MR tanker demand and product tanker earnings in northern Asia and Singapore. Analysts estimate the refinery shutdowns equal 1.5–2% of global crude tanker tonne-mile demand and could eventually add up to 2% to global product tanker tonne-miles.

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Northern Sea Route Sees Modest Growth in 2025 Despite Difficult Ice Conditions

Transit activity on the Northern Sea Route (NSR) increased slightly in 2025, with 103 voyages by 88 vessels carrying an estimated 3.2 million tonnes of cargo, up from 97 voyages and 3.1 million tonnes in 2024. Bulk carrier voyages rose from 15 to 23, a significant increase accompanied by a 28% rise in deadweight, while container ship transits grew from 11 to 15, with deadweight up 39%. Despite growth in these segments, crude tanker voyages declined by two, reflecting reduced oil shipments from Murmansk, though LNG carrier voyages increased by one. Ice conditions were notably unfavorable in 2025, with the main open-water window lasting only about two weeks, and the eastern NSR—especially the East Siberian Sea—remaining the most challenging. CHNL concludes the NSR remains mainly a seasonal alternative route, with most cargo flows still relying on traditional shipping lanes and only shifting to the NSR briefly in summer to save transit time.

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UAE Targets Higher LNG Exports as Global Demand Surges

The UAE plans to increase LNG exports while meeting its own domestic needs, according to Energy Minister Suhail al-Mazrouei. He noted that global gas demand is rising faster than investments in new production, aligning with recent comments by Qatar’s energy minister. Growing energy needs—especially from artificial intelligence—are expected to push global LNG demand to 600–700 million tons annually by 2035. The UAE’s ADNOC-backed investment arm, XRG, aims to build a gas and LNG portfolio with a 20–25 million ton annual capacity by 2035. The push reflects the UAE’s strategy to position itself as a major LNG supplier amid tightening global supply.

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NextEra and Google Expand Energy Partnership as AI Surge Drives Massive New Power Build-Out

NextEra Energy and Google expanded their partnership to support new U.S. data-center campuses, building on the 3.5 GW of power capacity they already operate or have contracted. Surging electricity demand from AI is driving both companies to develop new generation sources, with NextEra planning to add at least 15 GW of data-center power by 2035. The utility is also partnering with ExxonMobil on a 1.2-GW natural-gas plant with carbon-capture technology and is restarting the Duane Arnold nuclear plant in Iowa to supply Google under a 25-year contract. NextEra has secured more than 2.5 GW of new energy agreements with Meta and extended nuclear supply arrangements with WPPI Energy into the 2050s. The company raised its earnings outlook, projecting $3.62–$3.70 per share in 2025 and $3.92–$4.02 in 2026.

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US Judge Overturns Trump’s Nationwide Ban on Wind Energy Projects

A federal judge has ruled President Donald Trump’s executive order banning new wind energy projects “arbitrary and capricious,” declaring it illegal less than a year after it halted nationwide approvals. The January order froze dozens of onshore and offshore wind developments, jeopardizing billions in investments and threatening jobs, especially along the US East Coast. Trump justified the ban by citing “legal deficiencies” in previous approvals, while his administration signaled plans to revoke multiple offshore wind permits. The ruling was celebrated by environmental and clean-energy groups, who said it protects consumers, workers, businesses and the climate. The White House criticized the decision, arguing that Biden-era policies favored offshore wind over other energy sources.