Oil Prices Climb as U.S. Tanker Seizure Heightens Supply Fears

Oil prices rose on Wednesday after U.S. officials confirmed the seizure of an unidentified tanker off Venezuela’s coast, adding pressure to an already supply-tight market. Brent futures settled up 27 cents at $62.21 per barrel, while WTI gained 21 cents to $58.46, with both benchmarks extending gains to about 1% post-settlement. Analysts warned prices could react more sharply if additional U.S. interdictions occur, amid existing concerns over Venezuelan, Iranian, and Russian crude flows. The seizure coincided with Ukraine disabling a Russian-linked tanker—its third strike in two weeks—and a U.S. Fed rate cut that may support future oil demand. Earlier price weakness followed U.S. data showing a smaller-than-expected crude inventory draw of 1.8 million barrels versus analysts’ expectations of 2.3 million.

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U.S. Seizes Sanctioned Venezuelan Oil Tanker

The U.S. seized a sanctioned oil tanker off the coast of Venezuela, with President Donald Trump calling it “the largest one ever” and signaling increased pressure on President Nicolás Maduro. The tanker, identified by maritime sources as the Skipper, had loaded about 1.1 million barrels of Venezuelan Merey crude before being boarded by U.S. forces using helicopters and armed teams. The action comes amid a broader U.S. military buildup and more than 20 recent strikes on suspected drug vessels, which experts warn may be unlawful and which a new poll shows many Americans oppose.

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Ukraine Disables Sanctioned Russian Oil Tanker in Third Shadow Fleet Strike

Ukraine’s sea drones struck and disabled the tanker Dashan in the Black Sea as it traveled toward Russia’s Novorossiysk port, marking Kyiv’s third attack in two weeks on vessels linked to Russia’s “shadow fleet.” These unregulated tankers are used to move Russian oil despite Western sanctions, helping finance Moscow’s war effort. The drone strike caused severe stern damage while the ship was sailing with its transponders off, and the vessel is already under EU and UK sanctions. The attacks have intensified risk in the region, sharply increasing war insurance costs and prompting Russian President Vladimir Putin to threaten cutting Ukraine’s access to the Black Sea. Ukraine has been targeting Russian oil infrastructure for months, but the recent tanker strikes reflect an expanded maritime campaign, with at least seven similar blasts on Russian-linked tankers since late 2024.

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Kazakhstan Faces Output Cuts as CPC Export Bottleneck Extends into Mid-December

Kazakhstan risks curtailing oil production as repairs to a damaged mooring at the Caspian Pipeline Consortium (CPC) terminal have been delayed until December 15, leaving only one of three moorings operational. The CPC system requires at least two functioning moorings to maintain full export levels, causing storage tanks to fill and creating the risk of forced production cuts. KazTransOil is diverting less than 100,000 bpd through alternative routes—including increases of 232,000 tons via Atyrau-Samara, 58,000 tons via BTC, and 72,000 tons to China—but these volumes fall far short of CPC capacity, where a single mooring handles about 800,000 bpd. The CPC system, which accounts for 80% of Kazakhstan’s oil exports and is used by Chevron, ExxonMobil and Shell, has suffered repeated Ukrainian drone attacks, including severe damage in late November. As a result, CPC shipments in November fell by 155,000 barrels per day from October, heightening concerns about export reliability.

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Indian Refiners Increase Russian Oil Buying as Reliance Pulls Back Over Sanctions Risk

Four of India’s seven largest refiners — IOC, BPCL, HPCL, and Nayara— are buying Russian crude again, securing around 10 cargoes recently as discounts push prices down to $40–$45 per barrel. These refiners together account for over 60% of India’s total crude imports this year. Reliance Industries, formerly India’s largest buyer of Russian oil with a 500,000 barrels-per-day term deal with Rosneft, has halted purchases to avoid violating US and EU sanctions, and is expected to receive its final Urals cargo on December 17. India’s imports of Russian crude, which peaked at over 2 million bpd in June, are forecast to drop to 1.3 million bpd in December and 1–1.2 million bpd in early 2026 as sanctions tighten. Smaller refiners like MRPL and HMEL have also stopped buying Russian oil, potentially leaving Rosneft with significant unsold volumes if Reliance stays out of the market.

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BP Leads $279 Million Bid Surge in Trump’s First Gulf of America Oil Lease Sale

BP emerged as the top winner in President Trump’s first Gulf of Mexico offshore oil lease sale of his second term, securing 50 tracts with bids totaling $61 million as overall winning bids reached $279 million. The auction covered 181 tracts and drew 219 bids, but generated about $100 million less than the final sale under President Biden due to companies bidding more selectively under Trump’s new regular lease schedule. Woodside Energy and Chevron followed BP with $38 million and $33 million in successful bids, respectively. Environmental groups denounced the sale as a dangerous expansion that increases spill risks in a fragile ecosystem. Industry organizations praised the return to predictable lease sales, saying it strengthens energy investment planning and supports U.S. energy dominance.

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Asian Refiners Secure 2026 Diesel Term Deals at Sharply Higher Premiums

Major Asian refiners have sold 2026 diesel term cargoes at significantly higher premiums to Singapore benchmarks, reflecting bullish expectations for tighter supply next year. Spot premiums for December 10ppm diesel recently hit two-year highs due to unexpected refinery outages and strong year-end buying. Taiwan’s Formosa Petrochemical Corp locked in monthly 750,000-barrel cargoes at premiums of 60–70 cents per barrel, with optional quarterly cargoes going as high as 80 cents—well above this year’s 20–40 cent levels. South Korea’s SK Energy and GS Caltex also sold 10ppm diesel at about 30-cent premiums, compared with parity to 20 cents in 2025. Jet fuel term deals from FPCC and GS Caltex were concluded at even stronger premiums of 80 cents to $1 per barrel, supported by expectations of firmer heating demand into early 2026.

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Platform Fire and Storms Drag Suezmax Rates to Lows

Suezmax rates have dropped to $60,200 per day on the key WAF–N. Europe route, falling 25% in a month as Atlantic basin activity hit its lowest level since February. Total Atlantic voyages fell to just under 250 in November, down 37 month-on-month, driven largely by a 16% plunge in West African exports after a fire shut Nigeria’s Yoho platform. Black Sea and Caspian suezmax activity fell even further — down 19% — due to repeated Ukrainian drone strikes on Novorossiysk and severe storms that delayed loadings. In South America, crude volumes shifted to VLCCs as Brazil and Guyana sent more barrels to Asia and winter VLCC restrictions in Guyana were waived, reducing suezmax demand. The Mediterranean was one of the few bright spots, with Libya and Algeria boosting exports and Libya’s flows to Asia hitting a 13-month high, partially offsetting declines elsewhere.

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Rising Floating Storage Fuels Oil Glut Debate as VLCC Rates Hold Above $120,000 per Day

Floating storage continues to climb, rising by 7 million barrels from last week, 22 million barrels from last month, and 70 million barrels from last year. The surge comes amid a heated market debate over a potential oil glut, with Trafigura warning of a possible 4m bpd “super glut” next year driven by slowing Chinese demand growth. While some analysts believe this would trigger large-scale floating storage and pandemic-like tanker rate spikes, others such as Drewry argue that flat or rising Opec output is unlikely and expect Opec to balance the market, bringing rates down. In contrast, Arctic Securities maintains that oil demand and supply are higher than current estimates, pushing back against the glut narrative. Despite the uncertainty, VLCC earnings remain strong, with Clarksons reporting a fleet-weighted average of $127,900 per day and Middle East–China rates at $119,300 per day for non-scrubber, non-eco ships.