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It’s a great time to be an oil refiner — but a less great time to be filling up at the pump.In Europe, the US and Asia, giant plants are making money by doing what they’ve always done: converting crude oil into vital fuels and selling them at a profit.What’s different today is the scale of the threat to global supplies: Relentless attacks on Russia’s energy infrastructure, outages at key plants in Asia and Africa and permanent closures across Europe and the US have removed millions of barrels of diesel and gasoline from the world market.On top of these real-world impacts are traders’ fears of what’s yet to come: imminent US sanctions on Lukoil PJSC and Rosneft PJSC and fresh European Union curbs on fuels made from Russian crude threaten already squeezed supply-chains.The result is ongoing pressure on costs at the pump despite a fall in global oil prices — something that’s unlikely to sit well with a US administration that sees “affordable energy” as essential.“Global refinery margins are astronomical,” said Eugene Lindell, head of refined products at consultancy FGE NexantECA. “The signal you’re giving the global refining system, no matter where the refinery is located, is to just run flat out.”In the US, Europe and Asia, margins are the highest they’ve been at this time of year since at least 2018, according to fair value data compiled by Bloomberg. The profits are so good that refiners’ stock prices are also surging: Processors including Valero Energy Corp and Turkiye Petrol Rafinerileri AS have seen stellar rises, while Orlen SA gained more than 100% year-to-date.While expectations of a glut are dragging on crude prices, disruption to the global refining system is limiting how much oil can be turned into products like gasoline, diesel and jet fuel. While that benefits the processors still running, it also means the slump in headline oil prices isn’t being felt at the pump.A constant stream of attacks on Russia’s refineries — just this month, Ukraine claimed strikes on the Saratov, Orsk and Volgograd plants — is hampering fuel production. Last month, Russia’s huge oil product exports were on course to hit a multi-year low, and that was before drone attacks damaged key loading facilities in the port city of Tuapse.Product supplies are being further squeezed by outages elsewhere. In Kuwait, the giant 615,000 barrel-a-day Al-Zour refinery recently had only one of its three crude processing units operating, while a key gasoline-production unit at Nigeria’s huge Dangote refinery is reportedly scheduled to halt for about 50 days of maintenance in coming weeks, having only recently begun restarting.Meanwhile, US crude runs in recent weeks have been more than a million barrels a day lower than the same time last year, a huge drop from the peak summer demand months, when processing was at its highest seasonal level since 2019. The country has seen multiple refinery closures in recent years, as has western Europe, further pressuring fuel supplies.“Global refining activity has been challenged by a series of unplanned outages in October, further constraining product markets and pushing margins even higher,” the International Energy Agency said Thursday. Increased profits have prompted the watchdog to raise its estimates for runs at margin-sensitive refining assets in Europe and Asia this month and next.In the US, the upshot is a rise in the average price of diesel since President Trump took office, and little change in the cost of gasoline, which on Thursday stood at $3.08 a gallon. Benchmark crude futures have meanwhile come off about 20% since his second inauguration, amid forecasts of a large surplus.Supercharging these ongoing real-world supply pressures are traders’ fears over what’s on the horizon.“The current strength in refining margins is at least partially being driven by uncertainty around the upcoming US sanctions on Rosneft and Lukoil, as well as the EU’s January prohibitions on Russian products,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group.FGE’s Lindell estimates Lukoil and Rosneft’s combined Russia oil product exports are more than 800,000 barrels a day. The global seaborne trade in oil products is about 22mn barrels a day, according to Clarkson Research Services Ltd., a unit of the world’s largest shipbroker.Any major disruption to those exports would be a shock to the global fuels market, though the extent to which those barrels would really disappear is unclear. Russia has shown that it often manages to work around sanctions.There are also questions about what comes next for refineries outside Russia in which Lukoil is involved, including Bulgaria’s Burgas facility, the Netherlands’ Zeeland plant and Romania’s Petrotel.Then there are the EU restrictions, coming into force January 21, which restrict the delivery of petroleum products made from Russian crude into the bloc. Precisely how these will end up impacting Europe’s diesel supplies from India and Turkey — both of which have also been key importers of Russian crude — remains to be seen.“The sanctions against Rosneft and Lukoil, on top of the recent sanctions package out of the EU, tightened the noose around Russia’s neck,” said Carolyn Kissane, an associate dean at the Center for Global Affairs at New York University, where she teaches about energy and climate change. “At the same time, you’re seeing more attacks driven by Ukraine against Russian infrastructure, which is a hit to the products market.”

The global oil market faces an even bigger surplus next year of as much as 4.09mn barrels per day as Opec+ producers and rivals lift output and demand growth slows, the International Energy Agency said on Thursday.The outlook from the IEA, which advises industrialised countries, is the latest warning that the oil market is heading for oversupply. A surplus of 4.09mn bpd would be equal to almost 4% of world demand, and is much larger than other analysts’ predictions.“Global oil market balances are looking increasingly lopsided, as world oil supply is forging ahead while oil demand growth remains modest by historical standards,” the IEA said in its monthly report.Opec+, or the Organisation of the Petroleum Exporting Countries plus Russia and other allies, has been boosting output since April. Other producers, such as the US and Brazil, are also increasing supply, adding to glut fears and weighing on prices.Oil prices edged higher to around $63 a barrel after the IEA report to recoup some of the 2% drop on Wednesday after Opec shifted its 2026 outlook to a small surplus, having earlier seen a sizeable deficit.Global oil supply will grow by around 3.1mn bpd in 2025, and 2.5mn bpd next year, each up by around 100,000 bpd on the month, the IEA said.Supply is rising faster than demand in the IEA’s view even after upward revisions on Thursday. The agency now expects oil demand to rise by 770,000 bpd next year, up 70,000 bpd from last month, citing increased needs in petrochemical plants.The short-term outlook in the IEA’s monthly report contrasts with the agency’s annual outlook on Wednesday, which sees global oil and gas demand potentially rising until 2050.Opec sees a surplus of just 20,000 bpd next year according to Reuters calculations based on its own monthly oil market report on Wednesday, although this marks a further retreat from its forecast of a sizeable deficit.Global oil output was 6.2mn bpd higher in October than at the start of this year, divided evenly between Opec+ and non-Opec producers, the IEA said. Top Opec producer Saudi Arabia contributed 1.5mn bpd of the increase, while Russia added just 120,000 bpd amid sanctions and Ukrainian attacks.Russian oil exports have continued largely unabated despite new US sanctions on Russian firms Rosneft and Lukoil, which still may have the most far-reaching impact yet on global oil markets, the IEA said.The IEA added that new entities have already started handling Russian exports as it adapts to sanctions. In October, companies MorExport, RusExport and NNK, which have only been active since May, lifted around 1mn bpd of Russian crude and fuels, it said.The Paris-based IEA also drew attention to a sharp rise in global oil inventories, which rose to their highest since July 2021 in September at just under 8bn barrels.The increase was driven by a sharp increase in waterborne oil in storage, which rose by 80mn barrels in September.Preliminary October data shows further rises for global stocks, again driven by increasing waterborne barrels, the agency added.

A buildup of a billion barrels of oil on the world’s oceans includes a disproportionately large amount of crude from nations subject to some kind of sanctions — a sign the measures are bringing a degree of disruption to the oil trade. Of the surge in oil on tankers since the end of August, as much as roughly 40% of the increase is barrels from Russia, Iran, Venezuela, or unclear origin, according to vessel-tracking data from Vortexa, Kpler and OilX. Even the lowest estimate, at about 20%, is a larger share of global crude production than the three nations have. The buildup doesn’t mean the barrels will never sell, but it is a threat to the revenues of sanctioned petrostates, with further ramifications for a global oil market that’s forecast to be headed for oversupply. While the increase partly reflects higher output, it also suggests some level of difficulty discharging. There’s also been a simultaneous surge in unsanctioned supplies. The fate of all that crude on water, affected by sanctions or not, will go a long way to shaping how oil prices move over the next few months, traders said. Caution over the latest Western measures is triggering some reshuffling of crude flows, with ripple effects for major importers like India and China, while a stretched out tanker fleet briefly sent daily shipping costs above $100,000 a day. “Some of this increase is attributed to stricter Western sanctions, which have left Russian oil stuck on ships and unable to discharge,” Clarksons Securities analysts including Frode Morkedal wrote. “Previous buyers have purchased replacements from the Middle East and the Atlantic.” The buildup in restricted oil is led by Russian supplies, according to a Bloomberg analysis of the data from the vessel-tracking firms. Russian seaborne shipments have risen in recent weeks, with the country pumping more oil as it unwinds earlier production cuts alongside partners in the OPEC+ group of oil producers. It’s likely that some crude is being diverted to export terminals as a result of Ukrainian attacks on Moscow’s oil infrastructure, particularly refineries. **media[381193]** An unprecedented Western clampdown on buyers of Russian barrels, meanwhile, is stopping some cargoes from discharging, with Indian refineries notably refraining from taking cargoes and signs that China might not be willing to pick up the slack. US sanctions on Russia’s two largest oil producers, Rosneft PJSC and Lukoil PJSC, have made trading their oil even more difficult. Russia’s oil-related tax revenues fell year on year by more than 24% last month, according to Bloomberg calculations based on Finance Ministry data. Russia’s government already expects funds from oil and gas flowing into the budget this year to be the lowest since the pandemic of 2020. Iranian shipments have also surged, hitting the highest level in seven years in October, the same month when the US placed sanctions on a major Chinese terminal for its role in buying barrels from Iran. OilX, a unit of consultant Energy Aspects, says its oil-on-water data covers confirmed shipments, including volumes from countries such as Iran and Venezuela, which often experience delays due to dark fleet activity. As a result, the volume may be revised higher over time. Vortexa says that in general its oil-on-water numbers tend to overcount and be revised lower as ships discharge. But the current situation is far from usual. To be sure, there is plenty of non-sanctioned oil in tankers at sea, too, as global output increases. OilX data show that the single largest contributor to the increase since the end of August has been Saudi Arabia, closely followed by the US and Russia. The kingdom shipped oil overseas at the highest rate in two-and-a-half years last month, as it continues to reclaim market share lost over years of output curbs from the Organisation of the Petroleum Exporting Countries and its allies. At the same time, the amount of American crude at sea has climbed after shipments hit their highest monthly average level since July 2024 in October. Volumes rose after processors in Asia snapped up US cargoes over the summer when Middle Eastern prices jumped relative to other regions, in what is called an arbitrage window. But the barrels on water from nations subject to sanctions represent a larger part of the increase than their collective slice of global crude production of about 17%, according to OilX data. “It’s clear that there is a lot of crude on the water now,” Brian Mandell, executive vice president of marketing and commercial at Phillips 66, said on an earnings call late last month. “We’re kind of waiting to see what those crudes are.”

The International Energy Agency (IEA) announced that global demand for oil and gas may continue to rise until 2050, marking a departing from its previous forecasts that had predicted a faster shift toward clean fuels.The Agency, headquartered in France, said in its World Energy Outlook 2025 report that oil demand could reach 113 million barrels per day by mid-century, an increase of 1 3% compared to 2024 levels. It added that global energy demand is expected to rise by 15% by 2035 under the current policies scenario, which assumes the continuation of existing government measures without factoring in more ambitious climate goals.The report also pointed to a significant potential increase in liquefied natural gas (LNG) projects, with around 300 billion cubic meters of additional export capacity to be added by 2030. This would expand the market from 560 billion cubic meters in 2024 to more than one trillion cubic meters by 2050, driven by growing demand in sectors such as artificial intelligence and data centers.The IEA further projected that investments in data centers could reach USD 580 billion in 2025, surpassing global annual spending on oil, which currently stands at around USD 540 billion.

India’s Reliance Industries Ltd is seeking to sell cargoes of Middle Eastern oil, an unusual move for a refiner that’s normally a major buyer.There’s heightened focus on the actions of the nation’s oil processors since the US slapped sanctions on key supplier Russia. Reliance has been trying to sell grades including Murban and Upper Zakum on the spot market to domestic and international refiners, according to people at the companies receiving those offers. They asked not to be named as they aren’t authorised to speak publicly.India’s largest privately owned refiner, controlled by billionaire Mukesh Ambani, is typically a major importer of oil from the Middle East and Russia. The recent sanctions on Moscow’s two largest oil companies have spurred expectations that Indian processors will have to buy more barrels from countries such as Saudi Arabia.Yet the offers suggest Reliance has ample supply for now, though the reasons why are unclear. Traders are watching Indian buying patterns closely to see whether refiners will hoover up grades tied to benchmark crude prices — potentially supporting oil futures — or find ways to sustain imports from Russia.The Mumbai-based company has already sold a cargo of Iraqi Basrah Medium crude to a Greek buyer. It’s unclear how much crude Reliance is looking to offload in total; and it could choose to sell some but not all of the cargoes.A Reliance Industries spokesperson didn’t reply to an email seeking comment.Refiners in India, the world’s third-largest importer of crude, are busy trying to diversify their supply sources after Western sanctions made buying discounted Russian oil more difficult and risky.Reliance had been Indian’s top importer of Russian crude this year, but snapped up millions of barrels from the Middle East last month following the White House penalties against Russia, which were aimed at depriving the Kremlin of funds for its war in Ukraine.Reliance said last month that it would abide by the US sanctions, and would be adapting its operations to meet the compliance requirements. The refiner previously had a term supply deal for around 500,000 barrels a day from Russian producer Rosneft PJSC.

OilCrude prices recovered from a midday dip on Friday on hopes Hungary can use Russian crude oil as US President Donald Trump met Hungary's Prime Minister Viktor Orban at the White House.Brent crude futures settled at $63.63 while US West Texas Intermediate (WTI) crude finished at $59.75. For the week, both benchmarks fell by around 2%.Hungary has maintained its reliance on Russian energy since the start of the 2022 conflict in Ukraine, prompting criticism from several European Union and Nato allies.Private reports also pointed to a weakening US labour market. US Labor Department employment reports are not being issued because of the government shutdown.Meanwhile, Opec+ decided on Sunday to increase output slightly in December. However, the group also paused further increases for the first quarter of next year, wary of a supply glut.GasAsian spot liquefied natural gas (LNG) prices were flat this week, as ample supplies and soft demand kept a lid on gains.The average LNG price for December delivery into northeast Asia held at $11.10 per million British thermal units (mmBtu), industry sources estimated.**media[378974]**Spot charter rates have continued to rise, which has been the primary driver behind a wider spread between Asian and European prices, with Asian prices having to hold a larger premium to continue attracting the same flows, analysts said.In Europe, the Dutch TTF price settled at $10.57 per mmBtu, recording a weekly gain of 1.0%. Gas inventories in Europe have remained around 83%, as gas demand is still weak due to weather conditions, but LNG imports have remained high.This article was supplied by the Abdullah bin Hamad Al-Attiyah International Foundation for Energy and Sustainable Development.

Abu Dhabi’s five-year-old oil trading arm plans to boost the volume it handles by two thirds in the next few years as it expands internationally, its CEO said.State-owned Abu Dhabi National Oil Co sees trading as a way to capture greater value from selling fuels produced in the emirate and elsewhere, said Ahmed bin Thalith, chief executive officer of the unit. The next phase of Adnoc Global Trading’s expansion will be an office in Houston in 2027, he said.“In only five years, we’ve established offices in Singapore, in Geneva and, soon to come, in the US,” bin Thalith said in an interview at the company’s office in Abu Dhabi. “This will put us on the global map and this will increase our footprint.” AGT is handling the equivalent of about 1.1mn to 1.2mn barrels of oil a day and aims to expand that to about 2mn barrels a day, he said.Middle Eastern oil producers have for decades dominated global crude markets, traditionally selling their cargoes on long-term contracts. More recently, companies like Adnoc and Saudi Aramco have been setting up and expanding trading operations as growing domestic refining capacity gave them access to higher-value products such as diesel that can be sold into new markets like Europe.Expanding to the US with a Houston office in 2027 will help achieve its volume targets, bin Thalith said. AGT has started a petrochemicals trading desk and will expand it as Adnoc builds its presence in that industry internationally and with plants on the US Gulf coast, he said.“Once you tap into a market such as the US where most of the products are exported, then that will give you a big boost,” he said.AGT is a joint venture between Adnoc, Italy’s Eni SpA and Austria’s OMV AG. Those partners also operate the emirate’s refinery at Ruwais on the Arabian Gulf coast, with capacity to process more than 900,000 barrels of crude a day. Some of the refinery’s gasoline, diesel and jet fuel is used domestically, but the majority goes for export.“We own the full value chain, from the well all the way to the distribution, and trading comes in and takes advantage of the whole operation,” bin Thalith said. “When you have one of the biggest refineries in the world behind you, that’s a very good thing to start with” and helped the trader be profitable “from day one,” he said.Adnoc and Saudi Aramco are both expanding their trading units in an effort to maximise profits and replicate the success of international firms such as Shell Plc and BP Plc. Another business called Adnoc Trading that’s wholly owned by the Middle Eastern producer, deals in crude oil and liquefied natural gas.International oil companies have long profited from selling on the open market crude from fields they operate and fuels from their own refining networks. That business, known as trading the system, gives the oil companies a base around which to buy and sell fuels produced by others, create hedges and react to market opportunities, a model the Middle Eastern producers are seeking to follow.“If you look at other companies that have those mega systems, they have a ratio of one system barrel to three non-system barrels,” bin Thalith said. “So we’d like to reach that point.” Regional rival Aramco Trading moved 7.3mn barrels a day of crude oil and refined products in 2024. Vitol Group the world’s largest independent trader, had a similar volume last year.Some traders have struggled make money this year due to price volatility caused by geopolitics rather than pure market fundamentals.“People confuse volatility with uncertainty and they’re not the same,” bin Thalith said. “Uncertainty is something like sanctions, like trade wars, that you don’t know when it’s going to end and it impacts you in a way that is different than the normal movement of the market.”

Oil prices rose in early Asian trading on Monday after OPEC+ announced a pause in output hikes during the first quarter of 2026, reflecting a cautious stance amid ongoing demand uncertainty. Brent Crude gained 0.47% to trade at $65.24 per barrel, after closing $0.07 higher on Friday. West Texas Intermediate (WTI) rose 0.45% to $61.43 per barrel. During an online meeting on Sunday, eight OPEC+ member states agreed to raise production by 137,000 barrels per day in December 2025, consistent with the increases implemented in October and November. The group subsequently announced a pause on further output hikes for January, February, and March 2026, citing "seasonality" and typically weaker demand during the first quarter. Both Brent and WTI fell by more than 2% in October, marking their third consecutive monthly decline and hitting their lowest levels in five months on October 20, amid concerns about oversupply and economic uncertainty linked to potential US tariff measures.

Oil prices declined on Tuesday, extending losses from the previous two sessions, due to OPEC's plans to increase output, which outweighed optimism about a potential trade deal between the United States and China.Brent Crude futures dropped by four cents to $65.58 a barrel, while US West Texas Intermediate (WTI) crude futures fell by nine cents to $61.22 a barrel.Russia's Lukoil, the country's second-largest oil producer, announced its plans to sell its international assets following US sanctions.The United States announced last week a round of sanctions on Russia related to the oil sector.US Treasury Secretary Scott Bessent said in a statement that sanctions were imposed on Russia's two largest oil companies, attributing the move to Moscow's refusal to end the war in Ukraine. He added that the sanctions on Rosneft and Lukoil were due to their financing of Russia's war machine.US President Donald Trump seeks to bring an end to the conflict that began when Moscow launched its military operation in Ukraine on Feb. 24, 2022.

One person was killed, and six others injured on Sunday when a turbine exploded at an oil depot in the Al-Zubair district of Basra Governorate, southern Iraq. An Iraqi security source said the explosion occurred in a tank in Al-Barjisia, causing a temporary drop in crude oil exports. He explained that Basra Civil Defense teams are working to extinguish the fire with support from oil firefighting teams. He noted that the head of the Zubair 2 Warehouses Division was killed, and six oil workers were injured in the incident. In a similar incident, an explosion occurred in June at an oil field in Salah Al-Din Governorate, central Iraq, injuring five workers.

His Excellency Prime Minister and Minister of Foreign Affairs Sheikh Mohammed bin Abdulrahman bin Jassim Al-Thani met on Thursday with Their Excellencies Ministers of Oil, Gas, and Energy participating in the Ministerial Meeting of the Gas Exporting Countries Forum (GECF) in Doha. His Excellency welcomed the guests, wishing them success in their meeting. His Excellency the Prime Minister and Minister of Foreign Affairs, reiterated Qatar's call to enhance dialogue and cooperation among the GECF's member states to ensure the security of natural gas supplies and the stability of the global gas market.

The Kuwaiti crude oil price rose $1.46 during Wednesday's trading to reach $64.53 per barrel (pb) compared with Tuesday's $63.07 pb, Kuwait Petroleum Corporation (KPC) said on Thursday. Globally, brent futures rose by $3.03 to reach $64.35 pb and West Texas Intermediate climbed by $1.42 to reach $59.92 pb.