Winter Storm and Geopolitical Risks Lift Oil Prices Sharply

Oil futures settled about 3% higher as a severe winter storm cut U.S. crude output by up to 2 million bpd, or roughly 15% of national production, and temporarily drove U.S. Gulf Coast crude and LNG exports to zero. Brent closed at $67.57 a barrel and WTI at $62.39, supported by fears of supply disruptions and expectations of near-term inventory drawdowns. The market also drew support from Kazakhstan’s Tengiz oilfield, which is expected to restore less than half of normal output by February 7, tightening global supply despite the CPC pipeline returning to full loading capacity. Geopolitical tensions added a risk premium as U.S. naval forces moved into the Middle East amid rising friction with Iran. Meanwhile, OPEC+ is expected to maintain its pause on output increases for March, helping keep a floor under prices.

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PetroChina Pauses Venezuelan Oil Purchases

PetroChina has instructed its traders to avoid buying Venezuelan crude after the United States assumed control over the country’s oil exports this month, sources said. The move suggests Venezuelan oil flows to China will remain tight, pushing Chinese buyers toward alternatives such as Canadian, Iranian and Russian crude. Traders cited both political uncertainty and less competitive pricing, with discounts for Venezuelan Merey crude narrowing sharply since December. Trading houses Vitol and Trafigura are marketing the oil under U.S. oversight, but PetroChina is waiting for guidance from headquarters. Analysts expect China’s imports of Venezuelan crude to fall from February, despite China remaining Venezuela’s largest historical buyer.

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US Prepares Broad License to Ease Venezuelan Oil Sanctions and Speed Exports

The United States is preparing to issue a general license that would lift some sanctions on Venezuela’s oil industry, replacing the slower system of individual exemptions for companies. The move follows the U.S. capture of President Nicolas Maduro and is aimed at supporting a $2 billion oil supply deal and a longer-term $100 billion reconstruction plan for Venezuela’s energy sector. Previous sanctions and a December blockade cut exports to 500,000 bpd, down from 952,000 bpd in November, leaving PDVSA with large inventories. Recent licenses to Vitol and Trafigura have already helped drain 11.3 million barrels, but millions remain stored. The forthcoming license may prioritize U.S. companies and coincides with planned reforms to Venezuela’s oil law to attract investment and raise output.

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Kazakhstan’s Tengiz Oilfield Faces Slow Recovery After Fire and Power Outage

Kazakhstan’s largest oilfield, Tengiz, is expected to recover less than half of its normal output by February 7 as it slowly restarts following a fire and power outage, sources said. Production is forecast to reach about 260,000 bpd (26% of normal levels) by February 5 and around 46% by February 7, with uncertainty over the pace of further recovery. The Chevron-led operator has restarted production, but force majeure on CPC Blend exports remains in place, complicating Kazakhstan’s export schedule. Some sources say output could climb to around 670,000 bpd by mid-February, still well below last year’s peak of 900,000 bpd, while others warn a full recovery will be difficult.

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Chevron Seeks Improved Terms to Take Over Iraq’s West Qurna 2 Oilfield

Chevron is seeking better contractual terms from Iraq before agreeing to buy the giant West Qurna 2 oilfield from Russia’s Lukoil, sources said. The field accounts for about 0.5% of global oil supply and nearly 10% of Iraq’s output, and was nationalised earlier this month after U.S. sanctions hit Lukoil. Talks between Chevron and Iraq’s oil ministry are ongoing, with any revised terms requiring cabinet approval, while Lukoil has until February 28 to sell its assets. Iraq has recently improved contract terms, shifting to profit-sharing agreements to attract foreign investment after years of poor returns under service contracts. West Qurna 2, one of Iraq’s earliest post-2003 projects, currently offers among the lowest returns, and state-run Basra Oil Company is operating it temporarily as negotiations continue.

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India’s Crude Imports Hit Nine-Month High

India’s crude oil imports rose 1.6% month-on-month in December to a nine-month high of 21.59 million tons, reflecting steady demand from the world’s third-largest oil consumer. Year-on-year imports increased nearly 7%, while refined product imports and exports both declined, indicating strong domestic processing. Amid U.S. pressure to curb Russian oil purchases, Indian refiners are increasingly diversifying supply, boosting crude imports from Brazil and exploring options from Venezuela. However, Indian refiners say Venezuelan crude offers remain limited and mostly diverted to the U.S., with discounts not deep enough to compete with Russian barrels. As a result, India continues to rebalance its sourcing toward Latin America and the Middle East while selectively resuming sanctions-compliant Russian flows.

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EU Ban Reroutes Indian Diesel to West Africa, Reshaping Global Fuel Flows

India has stopped exporting diesel to the European Union after the EU banned fuel made from Russian crude, redirecting shipments instead to West Africa, where exports hit record levels. India sent no diesel to the EU in January, compared with a 2025 average of 137,000 bpd, while West Africa-bound exports surged to around 155,000 bpd in December. The policy shift is forcing Indian refiners to find alternative markets and is also reducing Turkey’s diesel exports to Europe. To offset the shortfall, the EU has increased fuel imports from the United States and the Middle East, accelerating a broader reshuffle of global oil trade routes.

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Winter Storm Sends US Diesel Prices Soaring Above Europe

U.S. diesel futures have surged relative to European benchmarks as a severe winter storm disrupted refinery operations and boosted heating oil demand. The New York Harbor diesel premium over European futures climbed above 40 cents per gallon, the highest in more than three years, driven by refinery curtailments, waterway closures near Houston, and seasonally low inventories. Major facilities, including ExxonMobil’s Baytown refinery, cut operations, while Midwest production also faced risks ahead of a heavy refinery turnaround season. Analysts said the cold snap in the U.S. Northeast, where nearly 5 million households rely on heating oil, was the key trigger, though the transatlantic spread could ease once temperatures normalize.

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Dynacom Plans $1.4bn VLCC Newbuilding Spree with Early China Deliveries

George Procopiou’s Dynacom Tankers Management is lining up an order for up to 12 VLCC newbuildings at China’s Hudong-Zhonghua, valued at more than $1.4bn and priced around $120m per vessel, below recent market benchmarks. The ships would be delivered in 2028, earlier than most available slots elsewhere, using berths tied to a planned new mega dry dock at the yard’s Changxing facility. Combined with up to 17 VLCCs already on order at other Chinese yards, the deal would lift Dynacom’s VLCC orderbook to nearly 30 vessels. Hudong-Zhonghua is expanding capacity to diversify into VLCCs amid strong tanker demand and high charter rates. The broader VLCC market remains buoyant, with rising newbuilding interest, resale speculation, and an orderbook now equal to just over 17% of the global fleet.

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Tankers International Launches Suezmax Pool as International Seaways Takes Full Control

Tankers International (TI) is launching a new suezmax pool starting with 11 vessels from International Seaways, marking its first major expansion beyond VLCCs as International Seaways takes full ownership of the pooling company. The move removes those ships from the Maersk Tankers suezmax pool and reflects growing alignment between VLCC and suezmax trading driven by geopolitics and market volatility. TI said the new pool will improve flexibility, expand route optionality beyond VLCC trades, and help maximize earnings across both tanker segments. CEO Charlie Grey said the expansion has been years in the making and positions TI to be more agile in fast-changing crude markets, with strong earnings potential given current conditions. TI expects fleet numbers to fluctuate but said its VLCC presence remains stable, with additional vessels likely to join both pools over time.