Oil Prices Dip Slightly as Strong US Growth Offsets Venezuela and Russia Supply Risks

Oil prices ended marginally lower as markets weighed robust U.S. economic growth against escalating geopolitical tensions that threaten supply. Brent crude slipped 0.2% to $62.24 a barrel and WTI eased 0.05% to $58.29, though both have rebounded about 6% since plunging to near five-year lows on December 16. Despite the recent recovery, Brent and WTI are on track for annual declines of roughly 16% and 18%, respectively—their steepest falls since 2020—amid expectations that supply will exceed demand next year. Disruptions to Venezuelan exports, Ukrainian drone attacks affecting Kazakhstan’s CPC pipeline, and ongoing Russia-Ukraine strikes on energy infrastructure have provided near-term support to prices. At the same time, U.S. crude inventories rose by 2.39 million barrels last week, adding to caution ahead of delayed official stock data.

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Ukraine Expands Strikes on Russian Energy Infrastructure Amid Intensifying War and Ceasefire Efforts

Ukraine said it carried out drone and missile strikes on key Russian energy infrastructure, including the Orenburg gas processing plant, the Temryuk seaport oil tanks, and the Novoshakhtinsk oil refinery, expanding its campaign against Russia’s energy and export logistics. The Orenburg facility, which also processes gas from Kazakhstan’s Karachaganak field, has a capacity of 45 bcm per year and was previously hit in October, with disruptions risking knock-on effects for Kazakh oil output. These attacks, alongside sanctions, are complicating Russian seaborne exports, while Kazakhstan is already facing lower exports after damage at the CPC terminal near Novorossiysk. Russia has continued heavy strikes on Ukraine, particularly Odesa, triggering emergency power outages, civilian casualties, and damage to port and industrial infrastructure. The escalation comes amid U.S.-led ceasefire efforts, with Kyiv and Washington still divided on key issues even as diplomatic contacts continue.

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CPC Oil Exports Slump to 14-Month Low After Drone Damage

Kazakhstan’s December exports of CPC Blend crude are set to fall to about 1.14 million bpd, down from an initially planned 1.7 million bpd and the lowest level in 14 months, after Ukrainian drone strikes damaged Russia’s Black Sea CPC terminal near Novorossiysk. The Nov. 29 attack left only one of three loading jetties operational, while bad weather has delayed repairs, forcing repeated cargo cancellations and moderating Kazakh production as storage tanks fill up. The disruption affects exports from fields operated by majors including Chevron, Exxon Mobil, Eni and Shell, with limited alternative routes available. From Dec. 1–23, the terminal loaded about 26 million barrels across 26 cargoes, but supplies have tightened enough to support physical Brent prices, which jumped more than $1 per barrel after the attack. CPC plans January exports at around 1.65 million bpd, assuming repairs allow additional loading points to resume operations.

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Reliance Secures Temporary US Waiver to Continue Rosneft Oil Imports

India’s Reliance Industries has received a one-month U.S. concession allowing it to continue receiving oil cargoes from Rosneft despite U.S. sanctions imposed in October, sources said. Reliance has a long-term agreement to buy 500,000 bpd of Russian crude for its 1.4 million bpd Jamnagar refining complex, the world’s largest, and has taken about 15 Rosneft cargoes since November 22. The company said these deliveries stem from pre-existing transactions being wound down in compliance with sanctions, adding that the final cargo under its Rosneft deal was loaded on November 12. Reliance is still scheduled to receive one Russian cargo each in December and January via trader RusExport, while processing later arrivals at its 660,000 bpd India-focused refinery to maintain EU fuel exports from its 704,000 bpd export unit. India’s Russian crude imports are expected to average 1.2–1.5 million bpd in December, down from 1.77 million bpd in November, amid pressure from Washington to curb purchases.

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Sanctions Push Back Russia’s 100 Million-Tonne LNG Ambition by Several Years

Russia has delayed its target to reach 100 million tons per year of liquefied natural gas output by “several years” due to Western sanctions, Deputy Prime Minister Alexander Novak said, citing restrictions affecting projects such as Arctic LNG 2. Updated government strategy now forecasts LNG production of 90–105 million tons by 2030 and 110–130 million tons by 2036, compared with an earlier ambition to command around 20% of the global LNG market by 2030–2035 from about 8% currently. Russia’s LNG output rose 5.4% in 2024 to 34.7 million tons, slightly below expectations, while oil and gas condensate production is seen broadly flat at around 516 million tons, or 10.32 million bpd. Sanctions, EU plans to ban Russian LNG imports from January 1, 2027, and growing competition from the U.S. and Qatar have slowed progress, with Arctic LNG 2 only delivering its first cargo to China in August and Murmansk LNG, planned at 20.4 million tons per year, also facing delays.

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China Keeps 2026 Fuel Export Quotas Steady as Refined Product Exports Decline

China has issued 19 million tons of export quotas for gasoline, diesel and jet fuel in the first batch for 2026, unchanged from a year earlier, along with 8 million tons of low-sulphur marine fuel quotas, trade sources said. State-owned refiners Sinopec and CNPC received more than 70% of the fuel quotas, totaling 13.76 million tons, while private refiner Zhejiang Petrochemical was allocated 1.56 million tons. Of the 19 million tons, 6.6 million tons were designated for processing trade, mainly aviation fuel bunkering, and nearly 85% of marine fuel quotas went to Sinopec and CNPC. China uses the quota system to manage domestic supply-demand balance. In the first 11 months of 2025, China exported 52.65 million tons of refined oil products, down 3.2% year on year.

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TEPCO to Restart Part of Kashiwazaki-Kariwa, World’s Largest Nuclear Plant, After 14-Year Hiatus

Tokyo Electric Power Co (TEPCO) plans to restart one unit of the Kashiwazaki-Kariwa nuclear power plant on January 20, marking its first reactor restart since the 2011 Fukushima disaster. The move follows approval from Niigata prefecture’s assembly and will bring a 1.36-gigawatt unit online at the world’s largest nuclear plant, which has a total capacity of 8.2 gigawatts. Located about 220 km northwest of Tokyo, the facility was shut along with other reactors after the 2011 earthquake and tsunami. Japan has so far restarted 14 of its 33 operable reactors as it seeks to reduce reliance on imported fossil fuels and double nuclear power’s share in its energy mix. TEPCO has indicated it may decommission some of the plant’s remaining five units, while another 1.36 GW unit is planned to restart around 2030.

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Eneos Leads Race for Chevron’s Singapore Refinery Stake

Japan’s Eneos Holdings is leading bids for Chevron’s 50% stake in the Singapore Refining Company, ahead of rivals including Glencore and Vitol, with the deal said to be nearing a conclusion though still subject to delays. The sale continues a trend of global oil majors divesting Singapore assets, following Shell’s sale of its Bukom refinery last year to a Glencore–PT Chandra Asri joint venture. SRC is a joint venture involving Chevron and a PetroChina-linked entity and operates a 290,000-bpd refinery on Jurong Island, producing fuels and chemical feedstocks for domestic and export markets. Singapore’s status as a major Asia-Pacific oil trading, pricing and shipping hub makes such downstream assets attractive to firms looking to reinvest large commodity profits. Chevron invited non-binding bids for the stake earlier this year as part of its portfolio review.

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White House Shifts Strategy to Enforce Venezuelan Oil “Quarantine” Through Sanctions

The White House has directed the U.S. military to focus primarily on enforcing a “quarantine” of Venezuelan oil exports for at least the next two months, prioritizing economic pressure over direct military action. U.S. officials say the goal is to intensify sanctions enforcement to push President Nicolás Maduro toward major concessions or leaving power, warning of a looming economic crisis by late January. The U.S. Coast Guard has already intercepted two Venezuelan oil tankers and is preparing to seize a third vessel, as part of a broader sanctions campaign. Meanwhile, the Pentagon has deployed more than 15,000 troops and extensive naval and air assets to the Caribbean, though not all are suited to sanctions enforcement. The policy has drawn criticism from Venezuela and U.N. experts, who argue the “quarantine” amounts to illegal armed aggression under international law.