Oil Rises as US Tightens Venezuela Blockade and Geopolitical Risks Build

Oil prices advanced as the United States escalated its blockade on Venezuela, boarding one tanker and pursuing another within weeks of its first seizure. Brent crude climbed toward $61 per barrel, while WTI hovered near $57, rebounding after two consecutive weekly declines. The U.S. Coast Guard boarded the Centuries tanker in the Caribbean carrying about 2 million barrels of Venezuelan crude, and is also pursuing the Bella 1, which is heading toward Venezuela. Supply concerns were further heightened after Ukraine struck a Russian shadow-fleet tanker in the Mediterranean for the first time and previously targeted Lukoil facilities in the Caspian Sea. Despite these risks putting a floor under prices, oil remains down about 20% this year, pressured by oversupply as OPEC+ restores output faster than expected amid weak demand.

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Sanctioned Russian Naphtha Tanker Enters Venezuela as Others Reroute Amid US Blockade

A U.S.-sanctioned tanker carrying about 300,000 barrels of Russian naphtha entered Venezuelan waters late Thursday, while another sanctioned vessel diverted course in the Atlantic, highlighting mixed responses to President Donald Trump’s order to block sanctioned tankers bound for Venezuela. The Gambia-flagged Hyperion, which loaded in Murmansk in late November, docked at Amuay Bay, though experts say it cannot be seized extraterritorially because its sanctions are linked to Russia—not terrorism. By contrast, the tanker Skipper, seized by the U.S. on December 10, had been sanctioned for ties to Iranian oil trading linked to designated terrorist groups. Other sanctioned ships showed divergent behavior, with the Agate redirecting toward Africa, the Garnet continuing toward the Caribbean, and the Boltaris making a U-turn earlier this month. Meanwhile, two unsanctioned VLCCs sailed for China and Chevron exported a Venezuelan crude cargo to the U.S., as Washington reiterated it will enforce sanctions only on designated vessels.

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Ukraine Hits Russian Shadow Fleet Tanker in Mediterranean in First Long-Range Drone Strike

Ukraine has struck a Russian “shadow fleet” oil tanker, the Qendil, in the Mediterranean Sea using aerial drones for the first time, marking a major escalation in its campaign against Russian oil shipping. The tanker, which was empty, sustained critical damage in neutral waters more than 2,000 km (1,250 miles) from Ukraine, and was located off Libya’s coast around 1330 GMT, according to MarineTraffic data. The Oman-flagged Qendil was sailing from Sikka, India, to Ust Luga in Russia’s Baltic Sea, highlighting India’s role as a major consumer of Russian oil. Ukraine has expanded attacks in 2024–2025 from refineries to Black Sea tankers, Caspian Sea oil rigs, and now Mediterranean targets, aiming to disrupt oil revenues funding Russia’s war. Maritime security groups say the strike demonstrates a multi-stage, long-range drone capability.

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CPC Plans January Cut to Black Sea Oil Exports Amid Mooring Damage and Drone Attacks

The Caspian Pipeline Consortium (CPC) plans to export about 1.65 million bpd of CPC Blend crude in January, down from 1.7 million bpd scheduled for December, a 3% reduction based on Reuters calculations. Actual shipments remain uncertain because CPC is operating at roughly half capacity, loading oil from only one of three single-point moorings, after SPM-2 was disabled by a Ukrainian drone attack and SPM-3 is under maintenance. As a result, December exports may fall well below plan, while January volumes could increase if SPM-3 returns to service and delayed cargoes are shipped. Further downside risks exist as supplies from Russia’s Caspian oil fields may decline in January following additional drone strikes. CPC, which handles over 80% of Kazakhstan’s oil exports, is partly owned by Russia (31%), Kazakhstan (20.75%), and Chevron (15%), with exporters increasingly turning to limited alternative routes such as China and Germany.

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Saudi Oil Shipments Jump at Start of 2026, Fueling Oversupply Fears

Saudi Arabia’s crude oil sales are set to rise sharply as 2026 begins, signaling growing global supply and deepening concerns over an oil glut. China is poised to receive about 50 million barrels, equivalent to 1.6 million bpd, the highest allocation since August, with deliveries expected in late January or February. Shipments to the United States are also climbing, with 509,000 bpd loaded in November and January arrivals projected at 594,000 bpd, the highest since 2022, weighing on US Gulf Coast prices. The surge comes as OPEC and its allies ramp up production despite weak demand growth, even as OPEC+ paused further output hikes for Q1 2026. The International Energy Agency forecasts markets will be oversupplied by 3.8 million bpd in 2026, a view reinforced by Dubai crude’s forward curve edging toward contango, a sign of near-term oversupply.

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China’s November Crude Imports Shift as Russia, Malaysia Fall and Indonesia Surges

China’s crude oil imports from Russia, its top supplier, fell 3.4% year on year in November to 8.35 million metric tons, or about 2.03 million bpd, down from 9.11 million tons in October. Imports from Malaysia dropped sharply by 36.7% to 4.26 million tons (1.04 million bpd), while shipments from Indonesia jumped 63.6% month on month to 2.52 million tons (0.61 million bpd), despite China importing only around 0.1 million tons from Indonesia in all of 2024, raising suspicions of masked Iranian crude flows. Imports from Saudi Arabia, China’s second-largest supplier, rose 8.4% year on year to 7.55 million tons (1.84 million bpd), while volumes from the UAE fell 16.8% to 2.94 million tons. Kuwait’s exports climbed 34.6% to 2.21 million tons, and Brazil’s surged 31.6% to 4.89 million tons (1.19 million bpd). China reported zero crude imports from the US for a sixth consecutive month, and none from Iran or Venezuela.

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Holiday Lull Fails to Dampen Strong End-2025 Tanker Market Outlook

Tanker rates eased ahead of Christmas, with average VLCC earnings down nearly 12% week on week to $110,500 per day, but brokers say this seasonal slowdown is no cause for concern. Fearnleys noted limited January Middle East fixtures so far, estimating that around 35 VLCCs currently open will likely all be absorbed once remaining December cargoes are fixed. Recent deals support resilience, including Delta Tankers fixing the 320,000-dwt Delta Glory (2012-built) at $120,468 per day for a Middle East–Thailand voyage in early 2026. Analysts highlight that global crude exports remain near record levels at around 50 million barrels per day, up 17% year on year over the past four weeks. Smaller segments were mixed, with suezmax rates at $67,300/day and aframaxes at $56,200/day, while unsold Nigerian cargoes of about 20 million barrels and bad weather could still push rates higher.

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Product Tanker Market Faces Fading Disruptions and Search for New Drivers in 2026

Product tanker owners may struggle to find earnings catalysts in 2026 as oil demand growth remains modest and recent disruptions begin to unwind, according to Steem1960 Shipbrokers. The strong market in 2025 was driven mainly by Red Sea reroutings and refinery dislocations, not demand growth, prompting analysts to warn that last year may have marked the peak of a “distance-inflated cycle.” While global oil demand is expected to grow only slightly in 2026, rerouting around the Cape of Good Hope has eased, with 55% of east–west voyages now using Bab al-Mandeb, up from 15% last year. The Baltic Clean Tanker Index was highly volatile in 2025, repeatedly topping 700, peaking at 885 in late November, but has since slipped to 754, closer to its 10-year average. Analysts caution that sanctions uncertainty, refinery dislocations and geopolitics have supported rates, but many of these factors are likely temporary as newbuilding deliveries rise.

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Ending Russia Oil Price Cap Could Trigger Major Expansion of Shadow Tanker Fleet

Scrapping the Western price cap on Russian oil and replacing it with a full maritime services ban could dramatically reshape tanker markets and drive demand for hundreds of additional shadow tankers, according to Kpler. Lead analyst Matt Wright estimates that about 43% of Russian oil exports would need alternative shipping, potentially requiring over 180 MR product tankers, plus 56 suezmaxes, 122 aframaxes, and 108 handysizes, assuming full enforcement. Currently, 687 Western-owned or insured tankers have carried Russian oil in the past year, compared with 587 existing shadow fleet vessels, while four tanker classes move 95% of Russia’s 5.7 million bpd exports. Higher Russian freight rates would likely be needed to attract ships, though shadow fleet utilisation is structurally constrained due to limited back-haul opportunities. While Russia’s crude exports rose 7% in 2025, tightening enforcement and a reported 6.5 million dwt vessel deficit suggest sourcing sufficient tankers is becoming increasingly difficult.