Oil Prices Sink to Near Five-Year Lows as Oversupply Fears Deepen

Oil prices settled near their lowest levels since February 2021 as concerns over global oversupply intensified and optimism grew around a potential Russia-Ukraine peace deal that could ease sanctions. Brent crude fell below $60 per barrel, while WTI dropped to the mid-$50s, pressured by expectations that additional Russian oil could re-enter the market. Analysts said the price decline reflects a structural imbalance of ample supply and sluggish demand, with forecasts pointing to a sizable surplus through 2026. Weak Chinese economic data, including slowing factory output and retail sales, added to worries that demand growth will not absorb rising supply. Although the recent U.S. seizure of a Venezuelan tanker provided slight support, abundant floating storage and pre-sanctions stockpiling have limited its impact on prices.

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Trump Orders Total Blockade of Sanctioned Oil Tankers in Venezuela

President Donald Trump ordered a “total and complete blockade” of all sanctioned oil tankers entering or leaving Venezuela, sharply escalating U.S. pressure on President Nicolas Maduro following the recent seizure of a tanker off the country’s coast. Trump also designated Maduro’s government a “foreign terrorist organization,” accusing it of using oil revenues to fund crime, while the Pentagon has carried out more than 20 strikes on alleged drug-trafficking vessels near Venezuela and Colombia. The measures come as Venezuela’s economy deteriorates, with dollar inflows tied to oil sales down about 30% in the first ten months of 2025 and annual inflation expected to exceed 400%. 

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Chevron Maintains Venezuelan Crude Exports as U.S. Seizures Force Deeper Discounts

Chevron has sold around 10 tanker cargoes of Venezuelan crude for loading next month, continuing exports as other buyers face disruptions after the U.S. seized the 310,000-dwt tanker Skipper on December 10. Sources said Chevron’s cargoes fetched weaker prices amid falling global oil benchmarks, while the seized vessel is now expected to discharge in the U.S. Gulf of Mexico, adding pressure to already soft prices. The U.S. action has prompted Venezuela’s customers, especially Chinese refiners, to demand deeper discounts, with prices for Merey heavy crude widening to as much as $21 per barrel below Brent from $14–$15 previously. PDVSA is also under strain from tougher contract terms, cyberattacks that disrupted systems, and more than 11 million barrels of oil stuck on tankers, while some ships sail in “dark mode” to avoid interception. China absorbed 778,000 bpd of Venezuela’s 952,000 bpd exports in November, but analysts warn supplies could tighten in February if delayed cargoes cannot depart.

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Saudi Midad Emerges as Leading Bidder for Lukoil’s $22bn Global Assets Amid Sanctions

Saudi Arabia’s Midad Energy has emerged as a frontrunner to acquire Lukoil’s international assets, valued at about $22 billion, as the Russian oil major seeks to exit foreign operations hit by sweeping U.S. sanctions. The assets, which include oilfields, refineries and thousands of fuel stations worldwide, have attracted interest from around a dozen bidders, including Exxon Mobil, Chevron and private equity firm Carlyle. Midad’s bid is underpinned by strong political connections in both Riyadh and Washington, as well as growing U.S.-Saudi economic cooperation under President Donald Trump. Sources said Midad plans an all-cash offer, with funds placed in escrow until sanctions on Lukoil are lifted, potentially involving U.S. partners. The process faces significant geopolitical hurdles, with the U.S. Treasury already blocking other bidders and setting a January 17 deadline for Lukoil to complete the sale.

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Pakistan and Russia Hold Talks on Potential Oil Sector Agreement

Pakistan and Russia are discussing a possible oil-sector agreement, according to Pakistan’s Finance Minister Muhammad Aurangzeb in comments to RIA news agency. Aurangzeb said Pakistan is keen to cooperate with Russia in areas such as oil exploration, production and refining, which he described as Russian strengths. He confirmed that energy ministries from both countries are currently holding discussions on the issue. Russia has also previously discussed upgrading a refinery in Pakistan, with Russian companies involved, according to Energy Minister Sergei Tsivilev. The talks reflect closer ties as Pakistan seeks cheaper energy imports and Russia looks for new markets amid Western sanctions, following Pakistan’s start of Russian crude purchases in 2023.

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Mexico’s Dos Bocas Refinery Pushes National Throughput to Decade-High

Mexico’s oil refining has climbed to its highest level in more than 11 years as the Dos Bocas (Olmeca) refinery ramps up operations close to full capacity. After three years marked by delays, power outages and feedstock constraints, the flagship plant has recently operated at nearly 87% of its installed capacity, its strongest performance since starting up in 2022. This has lifted crude processing across Mexico’s seven refineries to about 1.35 million barrels per day, the highest level in over a decade. The government has pinned its fuel self-sufficiency ambitions on Dos Bocas, despite the project taking far longer than the typical six to nine months needed for large refineries to reach stable output. Higher domestic fuel production is being closely watched by US Gulf Coast refiners, which rely on Mexico as a key outlet for surplus gasoline and diesel.

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EU Retreats from 2035 Combustion Engine Ban as Auto Industry Pressures Mount

The European Commission has proposed dropping the EU’s effective 2035 ban on new combustion-engine cars, marking a major rollback of its green transition amid pressure from automakers. The plan would allow continued sales of some fuel-burning vehicles, such as plug-in hybrids and range extenders, while shifting the target to a 90% cut in CO2 emissions from 2021 levels instead of zero emissions. Carmakers welcomed the added flexibility as EV demand softens and competition from Tesla and Chinese manufacturers intensifies, though climate groups warned the move undermines investment certainty and Europe’s EV competitiveness. Automakers would be required to offset remaining emissions using measures such as low-carbon steel and synthetic or biofuels, alongside eased interim targets for 2030–2032. The proposal reflects a broader global “reset” in EV strategies, as governments and manufacturers move away from rigid phase-out deadlines toward more flexible compliance systems.

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CMB.Tech Secures Green Ammonia Supply in China Ahead of Ammonia-Powered Fleet

Belgian shipowner CMB.Tech has invested in China’s green ammonia supply chain, signing an offtake deal with CEEC Hydrogen Energy and taking a minority stake in Jiangsu Andefu Energy Technology to secure fuel for its next-generation vessels. The Saverys family–controlled group called the move a major milestone in its decarbonisation strategy as it prepares to take delivery of 11 ammonia-powered ships in 2026. These include 10 newcastlemax bulk carriers and a container vessel, all fitted with dual-fuel diesel–ammonia engines and onboard ammonia storage. The investments also support the development of large-scale ammonia storage, logistics and future ship-to-ship bunkering infrastructure in China. CMB.Tech said it believes green ammonia, which emits no CO₂ when burned, will become cost-competitive with diesel and plans to further expand sourcing globally, including potential production in Namibia.

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Tanker Owners Accelerate Fleet Renewal as Older Product Carriers Exit the Market

Tanker owners are stepping up fleet renewal as Torm, International Seaways and Scorpio Tankers continue selling older product carriers while committing capital to newer, more efficient ships. Torm has reportedly sold its 2008-built LR2 Torm Maren for about $29m as part of a broader strategy to balance spot and time-charter exposure while modernising its fleet. International Seaways has extended its vintage tanker purge with the sale of two 2008-built MR vessels for $16.2m each, bringing total disposal proceeds this year to roughly $114m as it prepares to absorb new LR1 deliveries. Scorpio Tankers has mirrored this approach by agreeing to sell two 2016-built LR2s for $52.3m each while ordering two scrubber-fitted LR2 newbuildings in China for delivery in 2027. Together, the deals underscore a sector-wide push to monetise ageing tonnage at still-firm prices and reinvest in fuel-efficient vessels ahead of tighter environmental and regulatory requirements.

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Tariff Impact Cuts Port of Los Angeles Imports 11.5% as Trade Uncertainty Deepens

Imports through the Port of Los Angeles, the busiest seaport in the United States, fell 11.5% year-on-year in November to 406,421 TEUs as shippers front-loaded inventories to avoid President Donald Trump’s tariffs on goods such as toys, auto parts and metal furniture. Exports declined 8.4% to 113,706 TEUs, marking the 11th consecutive monthly drop, amid retaliatory tariffs and trade deals excluding the United States. Despite the volatility, port officials expect total throughput in 2025 to exceed 10 million TEUs, roughly in line with 2024 and the port’s third-highest level on record. Nationwide, U.S. imports fell 7.8% in November, reflecting softer demand for Chinese goods and a shorter Thanksgiving month. Looking ahead, economists warn that persistent tariff pressures, geopolitical risks and the eventual pass-through of tariff costs to consumers could weigh on consumption, even as tax refunds in early 2026 may temporarily boost spending by nearly 3% of GDP.