Oil Slides for the Week as Oversupply Fears Eclipse Geopolitical Risks

Oil prices ended Friday lower, posting a weekly loss of more than 4%, as concerns over a global supply glut and the prospect of a Russia-Ukraine peace deal outweighed geopolitical tensions. Brent crude settled at $61.12 a barrel and WTI at $57.44, both down about 1.5% on Thursday alone. Markets largely brushed off the U.S. seizure of a Venezuelan oil tanker, with analysts pointing to ample supply conditions. The International Energy Agency forecasts a 3.84 million bpd surplus next year—nearly 4% of global demand—although OPEC sees supply and demand roughly balanced in 2026. Some support remains from rising U.S.–Venezuela tensions and Ukrainian drone strikes on Russian energy assets, even as Russia’s seaborne oil product exports dipped only 0.8% month-on-month in November.

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Ukraine Says Drone Strike Halts Output at Russia’s Yaroslavl Oil Refinery

Ukraine’s military said it struck the Slavneft-YANOS oil refinery in Russia’s Yaroslavl region, with industry sources reporting that output has been suspended. The General Staff said explosions and a large fire were recorded at the site, while the extent of damage is still being assessed. Sources said Ukrainian drones damaged a primary processing unit (CDU-4) and a loading rack, forcing the shutdown of operations. The refinery, Russia’s fourth largest, has capacity of about 300,000 bpd, with the damaged unit accounting for roughly one-third of output. The attack comes amid escalating strikes on energy infrastructure by both sides as peace talks fail to deliver a breakthrough.

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Russian Retaliatory Strikes Set Turkish-Controlled Ships Ablaze Near Odesa

Two Turkish-controlled vessels were damaged by Russian missile and drone strikes near Odesa and Chornomorsk after Moscow retaliated against recent Ukrainian attacks on Russian-linked shipping and energy assets. The ropax Cenk T was badly hit in port, forcing crew evacuation amid regional power outages, while the chemical tanker Viva was struck while sailing in the Black Sea but continued its voyage with no injuries reported. Russia said the “massive” attacks targeted Ukraine’s military and transport infrastructure, following Ukrainian sea drone strikes on several Russian-trading tankers. The escalation has raised insurance costs and intensified concerns over maritime security and freedom of navigation in the Black Sea. Ukrainian officials said critical infrastructure, including power facilities and grain warehouses, was damaged, while Turkey urged an end to attacks threatening navigation safety.

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Black Sea Bottlenecks Deepen as Turkish Straits Tanker Delays Stretch to 12 Days

Oil tanker delays through the Turkish Straits have increased to around 12 days for a round trip, driven by winter storms, heightened security risks and shorter daylight hours. Traffic congestion has worsened due to stricter checks following recent attacks on tankers linked to Russian oil and strikes on port infrastructure in Novorossiysk. Ukrainian naval drone attacks and rising military activity in the Black Sea have further increased operational risks for shipping. The delays are putting additional strain on crude exports from Russia, Kazakhstan and Azerbaijan, particularly CPC Blend cargoes already affected by loading disruptions. Meanwhile, war-risk insurance premiums for Black Sea voyages have risen sharply, adding to costs as export loadings are set to hit multi-month highs.

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Russia’s Oil and Gas Revenue Slumps Toward Post-Covid Low as Prices and FX Bite

Russia’s state oil and gas revenue in December is expected to fall to about 410 billion roubles, nearly half the level of a year earlier and close to the lowest monthly total since August 2020. The decline reflects weaker crude prices and a stronger rouble, squeezing the Kremlin’s most important source of budget funding amid elevated defence and security spending. For the full year, oil and gas income is projected to drop almost 25% to 8.44 trillion roubles, undershooting the Finance Ministry’s forecast. Analysts warn that while this year’s deficit can be covered with state bond issuance, 2026 poses a tougher challenge as the budget was built on optimistic oil price and exchange-rate assumptions. Moscow may be forced to amend the budget next spring and draw on the National Wealth Fund, even as Western efforts continue to target Russian energy revenues to pressure an end to the war in Ukraine.

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US Blacklists Six VLCCs After Armed Seizure as Trump Escalates Venezuela Sanctions

The United States has sanctioned six VLCCs and their owning companies as President Donald Trump intensifies pressure on Venezuela’s energy sector, one day after US forces seized a tanker in the Caribbean. The newly blacklisted vessels range from 298,000 dwt to 319,000 dwt and include ships built between 2002 and 2007, owned or controlled by companies registered in the Marshall Islands, British Virgin Islands and the UK. The Treasury Department also sanctioned several individuals, including a businessman accused of facilitating oil shipments and relatives of Venezuelan President Nicolas Maduro, while reversing some sanctions relief granted under former president Joe Biden.

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Venezuela Oil Exports Stall as US Seizure Freezes Tanker Movements

Venezuela’s oil exports have dropped sharply after the U.S. seized a tanker and imposed new sanctions on vessels and shipping firms trading with the country, causing tanker traffic to nearly grind to a halt. The seizure — the first U.S. interdiction of a Venezuelan oil cargo since sanctions began in 2019 — has left shipowners wary as Washington prepares for further actions amid a military buildup in the Caribbean. Since the incident, only tankers chartered by Chevron, which operates under a U.S. license, have been able to sail Venezuelan crude into international waters. Around 11 million barrels of oil and fuel are now stranded offshore as tankers remain stuck in Venezuelan waters, many of them sanctioned or linked to Iranian or Russian crude trade. The disruption threatens a key revenue stream for President Nicolas Maduro’s government, even after Venezuela exported nearly 1 million bpd in November, mostly to China.

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CSET Confirms $1.12bn Order for 19 Tanker and Ethylene Newbuildings Under Cosco Mega-Deal

Cosco Shipping Energy Transportation (CSET) has confirmed orders for 19 new vessels — one ethylene carrier and 18 oil tankers — worth CNY 7.882bn ($1.12bn) as part of parent Cosco Shipping’s wider $7bn-plus, 87-ship mega-order. The vessels will be built across multiple Cosco Shipping Heavy Industry yards, with deliveries scheduled between 2027 and 2029. The tanker lineup spans aframax, LR2, LR1 and MR segments, featuring LNG and methanol dual-fuel or methanol-ready propulsion to support Cosco’s decarbonization strategy. Funding will come from internal resources or external financing, with payments made in five instalments tied to construction milestones. CSET said the order will strengthen its market position, address capacity shortages, meet rising global energy transport demand and deliver attractive investment returns while advancing low-carbon shipping goals.