2026.01.22

Oil prices settle higher on force majeure at Kazakh field, slow Venezuela exports

Oil prices rose 0.5% due to tighter supply from shutdowns at Kazakhstan oilfields and low Venezuelan exports. Brent futures settled at $65.24 a barrel, while West Texas Intermediate crude rose to $60.62. Kazakhstan halted output at Tengiz and Korolev fields, diverting oil from Kashagan due to terminal damage. Venezuelan oil exports reached 7.8 million barrels, but progress in output cuts has been slow. U.S. crude and gasoline stockpiles were expected to rise, while distillate inventories likely fell. The IEA revised global oil demand growth forecasts higher, suggesting a narrower surplus in the market. Geopolitical tensions could impact oil markets, with tariffs potentially slowing economic growth. API's inventory data is delayed by a U.S. federal holiday, with government figures expected on Thursday.

Global oil demand growth to rise in 2026, IEA says

The International Energy Agency has increased its forecast for global oil demand growth in 2026, predicting a rise of 930,000 barrels per day. This results in a slightly narrower surplus of 3.69 million barrels per day for the market this year. Despite this surplus, the IEA stated that current balances are providing some stability to market prices.

Venezuelan oil exports under supply deal with US progressing slowly, documents and data show

Venezuelan oil exports to the U.S. have reached about 7.8 million barrels under a $2 billion deal but have not fully reversed output cuts. The deal came after $500 million in proceeds from the first oil sales were deposited in a U.S. government fund. Refiners are hesitant to pay desired prices for Venezuelan oil, leading to slow sales. Tankers have started carrying Venezuelan crude to storage terminals in the Caribbean, with Chevron being the main exporter aside from trading houses. Oil prices rose on hopes of tighter supply, but Venezuela's output remains below capacity despite some fields restoring production.

India's Reliance to buy sanctions-compliant Russian oil in February and March

India's Reliance Industries Ltd is set to resume receiving Russian oil in February and March after a one-month pause due to sanctions. The company secured a U.S. concession allowing it to wind down dealings with sanctioned Russian oil producer Rosneft. While Reliance will continue purchasing Russian oil from non-sanctioned sellers, overall Russian oil imports in India are expected to remain low. Refiners in India are increasing imports of Middle Eastern crude as they shift away from Russian oil following the outbreak of war in Ukraine. Reliance plans to process Russian crude at its India-focused plant to continue selling fuels to the EU. The company had prepared for sudden sanctions by increasing purchases from other national oil companies.

China's naphtha imports to rise ahead of tax revamp, traders say

Chinese importers of naphtha are expected to increase their stocks in the first quarter of 2026 due to an imminent consumption tax on the petrochemical feedstock. The proposed tax of 2,105 yuan per ton would apply to naphtha sold domestically, impacting margins for petrochemical producers. The tax is aimed at closing a tax loophole and boosting state revenue, with local tax authorities informing suppliers in December about the upcoming changes. These taxes, previously waived, would now apply to transactions between refineries and end-users. Importers are expected to buy more naphtha in response to the taxes, with state-owned refiners being the most affected due to their dominant position in the market. In preparation for the policy change, Chinese importers such as CNOOC and Sinopec's Unipec have been seeking additional spot supplies at premiums, with CNOOC already purchasing a significant amount of naphtha in January. The increased imports and tax changes are likely to impact the petrochemical industry in China, tightening liquidity and increasing financial costs for companies.

To build or buy? VLCC owners face slim choice

The surge in demand for VLCCs, driven by geopolitical chaos and Sinokor Maritime's rush to acquire tonnage, has narrowed the price gap between newbuildings and secondhand vessels. Recent sales of Evalend Shipping's VLCCs set the tone, with reports of ships changing hands at $126.2m each. Owners looking to renew their fleets will face high prices and long wait times, with available delivery dates in 2029. Meanwhile, Canadian crude oil exports have surged as the country diversifies its customer base, with China accounting for a significant portion of seaborne exports. Canadian Prime Minister Mark Carney's efforts to market Canadian oil as a reliable alternative to Russian and Middle Eastern supply have been successful, with exports to Asia and the EU seeing significant growth. Despite forecasts of a supply glut, Canadian oil companies are projecting higher output in 2026, with infrastructure developments like the TMX pipeline and a proposed pipeline to the Canadian Pacific Coast set to increase export capacity. The recent buying spree of VLCCs has been described as a strategic move, with the long-term impact of these purchases yet to be seen.