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Political instability in Iran, a major oil producer, together with US President Donald Trump's recent threats against the country have reignited fears of disruptions to crude supplies, sparking price volatility on global markets.AFP explains what's at stake.Major producer:Iran remains one of the world's top ten oil producers even though its output has fallen sharply since the 1970s, hit in particular by rounds of US sanctions."In 1974, Iran was the third-biggest producer in the world after the US and Saudi Arabia, and ahead of Russia, producing some 6mn barrels per day," Arne Lohmann Rasmussen, chief analyst at Global Risk Management, told AFP.Today, Iran produces around 3.2mn barrels per day, according to Opec.This remains a significant amount, and Iran is believed to hold the world's third-largest crude reserves, cementing its strategic importance.Additionally, Iran's oil industry is in far better shape than that of Venezuela, another country hit by years of US sanctions.Highly profitable oil:Iranian crude is relatively easy and cheap to extract, with production costs as little as $10 per barrel, making it particularly profitable, Rasmussen said.Only Saudi Arabia, Iraq, Kuwait and the United Arab Emirates enjoy similarly low production costs.By comparison, major Western producers like Canada and the US typically face costs of $40-60 per barrel.With such low costs, Iran gains disproportionately from high global prices, a crucial factor for an economy heavily reliant on oil revenues.Dependence on China:US sanctions imposed since the 1979 Islamic Revolution have left Iran with few export options — especially after Trump revived a "maximum pressure" policy on Tehran upon his return to the White House.Last year, Washington targeted Chinese "teapot" refineries, which operate independently of state-owned oil companies, accusing them of buying Iranian crude.China, however, continues to buy Iranian oil at below-market prices.Iran exported an average of 1.74mn barrels a day in the fourth quarter of 2025, all of it bound for Chinese refineries, according to the markets data firm Kpler.Rasmussen noted that Iran produces roughly equal amounts of light and cheaper heavy crude, making it even more valuable to Beijing, which has lost access to Venezuela's very heavy crude since the US intervention in Caracas on January 3.What might Trump do?Rising tensions in Iran had pushed the international benchmark Brent crude price to $66 per barrel, its highest level since October.But oil prices tumbled after Trump said on Wednesday that the killings of protesters in Iran had been halted, easing fears of instability and potential US military action.He said the US would "watch it and see" about military strikes.If Washington were to attack Iran, "prices could quickly jump to around $80-$85", similar to the spike seen during the twelve-day conflict between Iran and Israel in June, said Kpler analyst Homayoun Falakshahi."What happens next will depend on the nature of the attack and the regime's response," he said.Tehran has issued strong statements but responded cautiously to Trump's comments to avoid escalation with Washington.But if the government's survival is at stake, the market reaction could be far more dramatic.Falakshahi warned that the biggest risks are that "Iran targets oil facilities in other Gulf countries" or attempts to block the Strait of Hormuz, the chokepoint through which 20 % of the world's oil supply flows. 

Vitol, Trafigura have global sales, shipping, logisticsUS oil majors wary of legal, credit, physical risksVenezuelan oil stored on old ships, was heading to China Global oil trading houses have emerged as early winners in the race to control Venezuelan crude flows, getting ahead of US energy majors wary of credit and legal risks and securing a potentially lucrative business opportunity in the country with the world's largest crude reserves.US President Donald Trump said US majors ‌would invest billions of dollars in Venezuela to quickly rebuild its dilapidated oil sector following the US capture of President Nicolas Maduro earlier in January. Trump met top ‌oil executives at the White House on Friday as his ‍administration outlines a long-term plan to raise $100bn to boost Venezuelan oil output.The first companies to secure any business in the wake of the US military action in Caracas, however, were Dutch-based trader Vitol and Singapore-headquartered peer Trafigura, rather than US majors.The US ⁠government tapped the giant merchant houses because they were better suited to quickly ⁠get Venezuelan oil exports flowing again, four industry sources familiar with the negotiations said. That is the first order of business for Washington before reconstruction can begin, so that revenue from exports under ‍U.S. supervision can fund the government of interim President Delcy Rodriguez in Caracas."Securing and marketing the initial barrels of Venezuelan crude oil was done at record speed to benefit both the American and Venezuelan people," a White House official told Reuters.Venezuela relies on oil exports for revenue, and has been starved of those proceeds for about a month under a blockade Trump imposed as he raised pressure on Maduro.Washington and Caracas are finalising a $2bn deal to sell up to 50mn barrels of crude to US refiners and other buyers — oil that had been stuck on ships in Venezuelan waters and in storage tanks because of the blockade.Facilitating the initial oil sales was critical to ensure funds could flow back into Venezuela for everyday services and a process is in place to maintain the steady flow of production, sales, and refining of Venezuelan crude oil, the White House official said.Trafigura and Vitol ‌have secured preliminary special licenses to negotiate and export the Venezuelan crude, and Trafigura is set to load its first cargo this week, Chief Executive Richard Holtum said at the White House meeting with Trump.The trading houses competed with Chevron to secure the supply deals. Chevron is the only US oil major that operates in Venezuela, as a minority partner in joint ventures with Venezuelan state oil ‍firm PDVSA. Chevron has a license from US authorities, which ⁠exempts it from the sanctions the US ‌had imposed to choke off oil revenues to Maduro.Trafigura is among the very few companies that can execute a deal of this size and complexity thanks to its scale, global shipping fleet and logistics network, Trafigura said.Vitol said it has a long history of working on complex transactions requiring agile logistics, operations and finance.The traders also won the Venezuelan oil export deals because they have a higher risk tolerance and are more nimble than major publicly traded oil companies, said three participants at the White House meetings.Legal teams and advisors have discouraged some big US oil producers from getting involved in the initial oil shipments due to the potential for Venezuelan creditors to seize the revenue, one of the sources said."How can it be guaranteed that creditors will not resort to legal action in the US or elsewhere?," said one adviser to a US oil company on Venezuelan affairs.The US government told the trading companies it would provide protection by controlling the bank accounts linked to the sales and shielding proceeds from creditors, three sources familiar with the matter said.Trump moved quickly on Friday to do that. He issued an executive order blocking courts and creditors from impounding revenue from the sale of Venezuelan oil held in US Treasury-controlled accounts, the White House said on Saturday.Venezuela owes more than $150bn in foreign debt. Among creditors are the same oil companies that Trump wants to help rebuild Venezuela's industry. ​ConocoPhillips and ExxonMobil are still trying to recover almost $14bn related ‌to asset expropriations 20 years ago.Trump and his team have told the oil companies they need to invest and rebuild the sector first, and that any debt repayment would come later.US oil companies would also be more reluctant to take the compliance risk ⁠involved in selling oil from tankers that have been blacklisted by Washington for their ‍involvement in sanctioned oil trade, three shipping sources said.Many vessels in the shadow fleet that ship sanctioned oil are old and have unknown or outdated insurance arrangements and safety certifications, which are required for entry into many ports. They do not meet the stringent chartering requirements of big US oil companies, two of the sources said.Another factor that may have contributed to US majors' reluctance for more involvement in short-term oil trade is their investment in China, one source said. The majors have tens of billions of dollars invested in China.Beijing has condemned the US action in Venezuela. China is among Venezuela's largest creditors, and PDVSA has been servicing that debt by paying with oil shipments.Most of the $2bn of oil in the deal being finalised was initially set for shipment to Chinese ​refiners. Chinese independent refiners have been the top buyers of Venezuelan crude since the US imposed sanctions on the country's main traders in 2020.Big US oil companies want to see the US lift sanctions on oil trade and for Venezuela to enact the legal framework that would make it attractive for them to work with Venezuelan entities and invest in the country.At the White House meeting with Trump, Exxon CEO Darren Woods called Venezuela "uninvestable" and said security guarantees and a reform of its hydrocarbon law were needed before Exxon could return to the country. Venezuela had twice expropriated Exxon's assets in the past, Woods said.Trump on Sunday said he might block Exxon from investing in Venezuela. "I didn't like Exxon's response," he said.Conoco CEO Ryan Lance said at the same meeting that his company was the largest non-sovereign creditor, with some $12bn in pending compensation for expropriation of assets. Trump told Lance the US would not look back at what had previously been lost in the country.Under the framework of their new deals, the trading houses would also supply lighter oil to Venezuela that it needs to dilute its heavy oil ⁠for exports, two sources said. Vitol were set to load the first cargo of that fuel this past weekend, oil industry sources said on Saturday. 

Chinese independent refiners are ‌expected to switch to ‍heavy crude from sources including Iran in coming months to replace Venezuelan shipments halted since the US removed ⁠the country's president, traders and analysts said.Caracas ⁠and Washington agreed to export up to $2bn worth of Venezuelan crude to ‍the US, President Donald Trump said on Tuesday, after US forces captured Venezuelan President Nicolas Maduro over the weekend.That arrangement is likely to curtail Venezuelan supply to China, analysts say, reducing a source of cheap oil for independent refiners known as teapots. The world's biggest crude importer is a major buyer of discounted sanctioned oil from Russia, Iran and Venezuela."The Venezuela drama ‌hits China's independent refineries the hardest, as they may lose access to the discounted heavy barrels," said Sparta Commodities analyst June Goh."However as there are ample Russian and Iranian ‍feedstocks available and Venezuelan barrels on ⁠water, we do ‌not foresee the teapots needing to bid up for unsanctioned barrels as the economics would likely not make sense for them," she said.China imported 389,000 barrels per day of Venezuelan oil in 2025, about 4% of its total seaborne crude imports, Kpler data showed.At least a dozen sanctioned vessels that loaded in December departed Venezuelan waters in early January carrying some 12mn barrels of crude and fuel, Reuters has reported. However, loadings for Asia at Venezuela's main ports have stopped since January 1, shipping data showed.With supply tightening, sellers of Venezuelan Merey crude for prompt delivery offered cargoes at ​discounts of about $10 per barrel to ‌ICE Brent versus $15 last month, said one trader, although trade has come to a standstill.Another trader said offers ⁠were at minus $11 per barrel.Venezuelan crude aboard ships in Asia remains sufficient to cover roughly 75 days of Chinese demand, limiting any immediate upside for alternatives, said Kpler senior analyst Xu Muyu.Teapots using Venezuelan oil are likely to switch to Russian and Iranian supply in March and April, and China can also tap non-sanctioned sources such ​as Canada, Brazil, Iraq, and Colombia, she said.Buyers have yet to start sourcing alternatives, trade sources said, with Iranian Heavy crude priced at a discount of about $10 per barrel to ICE Brent in ample supply, the cheapest alternative.Teapots may also consider Middle Eastern grades such as Iraqi Basrah, a Singapore-based trader said.Meanwhile, discounts for Canadian crude such as Cold Lake and Access Western Blend exported from the Trans Mountain pipeline have widened more than $2 this week to $4-5 a barrel to ICE Brent ⁠for April delivery to China on expectations of lower US demand, traders said. 

Between US demands for its crude, tankers threatened with seizure, storage tanks at overflow risk and bewildered local authorities, the outlook for Venezuela's oil industry has never been murkier.In the country's key oil port at Maracaibo, on the northwestern border with Colombia, few tankers are waiting to either load or venture out into the Caribbean — where American ships including the USS Gerald Ford, the world's biggest aircraft carrier, are waiting."They have oil that is stuck in Venezuela; they can't move it because of our quarantine and because it's sanctioned," US Secretary of State Marco Rubio said on Wednesday."We are going to take between 30 and 50mn barrels of oil," he added. "We're going to sell it in the marketplace — at market rates, not at the discounts Venezuela was getting."What that means for Venezuela's oil prospects is anyone's guess, not least in the volatile political landscape after President Nicolas Maduro's seizure by US forces on narco-trafficking allegations.But Washington is definitely banking on long-term control, according to Energy Secretary Chris Wright."We're going to market the crude coming out of Venezuela, first this backed-up stored oil, and then indefinitely," Wright said on Wednesday.State-owned Petroleos de Venezuela (PDVSA) acknowledged Wednesday that it had entered "negotiations" to sell oil to the US, on what it said would be the same terms as for other foreign customers."The process... is based on strictly commercial transactions under terms that are legal, transparent and beneficial for both parties," it said.But the statement came as US forces seized two more tankers, after previously seizing two others after Maduro's capture.Most shipping firms are holding back, either waiting at Maracaibo or avoiding it, even as a few tankers try to get past the US cordon.Since Trump imposed a full oil embargo in 2019, Venezuela has relied largely on a "shadow fleet" to sell mainly to China, Russia and Iran, a prospect highly uncertain after the US incursion.One tanker anchored in the Maracaibo bay on Wednesday, the Nord Star, is owned by Corniola and operated by Krape Myrtle, both based in Hong Kong and targeted by US sanctions."The shadow fleet is still operating, it's risky but it's getting out," one industry source based in Maracaibo told AFP.But with most tankers blocked, storage tanks at Maracaibo are nearly filled to the brim, threatening devastating overflows even as derricks keep pumping to the south and east of the port's massive inland lake.One operator, requesting anonymity, said local authorities "are ordering partner firms to cut output while waiting for tankers that will take the oil".The partner firms, known as "co-enterprises", were created under former strongman leader Hugo Chavez to join forces with energy groups from China, Russia, Belarus and other allies.Venezuela produces around 1mn barrels per day, above the 350,000 barrels immediately after Trump imposed a full oil embargo in 2019, though that was eased in 2023 after Russia's invasion of Ukraine.But it remains far below potential for a country with the world's largest known oil reserves, and exploration suggests further huge fields could yet be found.Caracas used to pump 3.5mn barrels daily but creaking infrastructure and scant investment make a return to that level unlikely in the short term — unless Trump makes good on his pledge to get US energy groups back into the country soon.Experts said it is likely that Trump will call and end to the US sanctions and embargo once his goals are met.For David Smilde, a Latin America specialist at Tulane University in Louisiana, Venezuela has always wanted to sell oil to the US at market value, instead of "sanctioned oil at a big discount using ghost tankers".In that sense, US companies coming into Venezuela would be "actually quite desirable", he said.But if the the US "really takes this oil and then does what it wants and maybe uses it to pay itself for the cost of an ongoing military operation, and none of it goes back to Venezuela... that could cause a problem", he said. 

OilOil prices edged up on Friday on possible disruptions from a US blockade of Venezuelan tankers as the market waits for news about a possible Russia-Ukraine peace deal.Brent crude futures settled at $60.47, while US West Texas Intermediate (WTI) crude finished at $56.66. For the week, Brent fell 1.1% and WTI fell 1.4%.As US President Donald Trump seeks an end to Europe's deadliest conflict since World War Two, the onus was on Ukraine and Europe to make the next move toward peace.Meanwhile, US Secretary of State Marco Rubio on Friday told reporters that the United States is not concerned about an escalation with Russia when it comes to Venezuela, as the Trump administration builds up military forces in the Caribbean. Venezuela pumps about 1% of global oil supplies.GasAsian spot liquefied natural gas (LNG) prices slipped to a fresh 20-month low this week, weighed by weak demand in the region and ample supplies.The average LNG price for February delivery into north-east Asia was $9.50 per million British thermal units (mmBtu), down from $10.00 per mmBtu last week, industry sources estimated.**media[395813]**Firm Chinese pipeline gas supplies and strong Japanese renewable power generation contributed to LNG demand weakness. The dip in prices had spurred some buying from price-sensitive importers last week.In Europe, the Dutch TTF price settled at $9.68 per mmBtu, recording a weekly gain of 2.3%. The market remains well supplied, buoyed by robust pipeline gas flows and a strong influx of spot US LNG into Europe. However, sentiment has stayed guarded amid forecasts for colder conditions early in the new year. 

Crude oil sales from the world’s biggest exporter, Saudi Arabia, are set to surge as 2026 begins, with customers from the US to Asia all set to receive more supply amid growing concerns over an oil glut.Chinese refiners are poised to receive around 50mn barrels from Saudi Arabia, the leading member of the Organisation of the Petroleum Exporting Countries. They will load next month and are equivalent to some 1.6mn barrels a day — and it’ll be the highest allocated amount since August, according to data compiled by Bloomberg. Those barrels will likely arrive in late January or in February.Meanwhile, there’s 509,000 barrels a day of crude from the kingdom bound for the US that had loaded in November, according to data from Kpler Ltd. That’s likely to be sustained, with OilX, a unit of Energy Aspects, estimating that January arrival of Saudi crude to the US will hit 594,000 barrels a day. The inflows would be the highest seen since 2022 and are weighing down prices of oil in the US Gulf Coast market.It’s all adding to signs that global oil markets will be awash with supply next year, as producers, including those within Opec, ramp up drilling at a time when demand growth is set to remain tepid. Opec and its allies had earlier agreed to revive oil production in the final months of this year in an apparent effort to regain market share.With oil prices falling, Opec+ last month said it will pause further production increases during the first quarter of 2026. Among leading forecasters, the International Energy Agency said markets will be oversupplied by 3.8mn barrels a day in 2026.Japan, as well, has seen higher Saudi flows, with November-loading crude bound for the Asian nation at around 1.3mn barrels a day, which would be the most since April 2023, Kpler data also showed. Projections indicated a higher rate of Japan-bound Aramco exports for December loading — over 1.4mn barrels a day — although the number can still change.The oil-derivative market is also flashing signs of oversupply. The forward curve for the Middle Eastern benchmark, Dubai, is hovering around a contango structure — where later-dated contracts trade at a premium to more prompt ones, indicating weak near-term demand. 

OilOil prices closed lower on Friday as a supply glut and a potential Russia-Ukraine peace deal outweighed worries about any impact from the US seizure of an oil tanker near Venezuela.Brent crude futures settled at $61.12, while US West Texas Intermediate (WTI) crude finished at $57.44. For the week, Brent fell 4.1% and WTI fell 4.4%.The US seized a sanctioned oil tanker off the coast of Venezuela, President Donald Trump said on Wednesday. The US is preparing to intercept more ships transporting Venezuelan oil, said sources close to the matter.Traders and analysts largely shrugged off worries about the impact of the tanker seizure, pointing to ample supply in the markets. Meanwhile, data in Opec's report, issued on Thursday, indicated that world oil supply will match demand closely in 2026. GasAsian spot liquefied natural gas prices fell to a 20-month low on ample supplies and mild weather, encouraging some buying from price-sensitive importers.The average LNG price for January delivery into north-east Asia was $10.00 per million British thermal units (mmBtu), down from $10.66 per mmBtu last week, industry sources estimated.Softer prices have encouraged some Indian buyers to increase purchases, as well as buying interest from Chinese importers. This spot demand, however, is mostly limited to opportunistic price-sensitive demand, with northeast Asian utilities largely well stocked.In Europe, the Dutch TTF price settled at $9.46 per mmBtu, recording a weekly gain of 1.2%. However, despite lower winter storage levels and rapid withdrawals, milder temperatures and strong pipeline gas and LNG supplies are keeping the market bearish. This article was supplied by the Abdullah bin Hamad Al-Attiyah International Foundation for Energy and Sustainable Development. 

OilCrude futures fell marginally on Friday as investors considered oil's geopolitical risk premium amid drawn-out Russia-Ukraine peace talks, while keeping an eye on Sunday's Opec+ meeting for clues about potential output changes.Brent crude futures settled at $63.20, while US West Texas Intermediate (WTI) crude finished at $58.55. For the week, Brent rose by 1.0% and WTI rose by 0.8%.The strength of fuel refining profit margins has supported crude demand in some places, but the bearish impact of an expected oil surplus is pressuring prices.Meanwhile, US oil production rose to a record 13.84mn barrels per day in September, an increase of 44,000 bpd, according to the Energy Information Administration, deepening concerns that the market may be heading toward a surplus.  GasAsian spot liquefied natural gas prices hit their lowest level in eight weeks on continued muted demand and high inventories, tracking a drop in European gas prices on hopes of a Ukraine peace deal.The average LNG price for January delivery into north-east Asia was $10.90 per million British thermal units (mmBtu), down from $11.66 per mmBtu last week, industry sources estimated.Weather is going to dictate movements as temperatures have fluctuated but haven't been consistently low enough to generate provincial buyers back to the spot market, analysts said.In Europe, gas prices remained near 18-month lows, driven by news of renewed US-brokered peace efforts between Russia and Ukraine fueling hopes for eased sanctions on Russia. The Dutch TTF price settled at $9.75 per mmBtu, recording a weekly loss of 4.4%. 

OilOil prices eased about 1% on Friday to settle at one-month low as the US pushed for a Russia-Ukraine peace deal that could boost global oil supplies, while uncertainty over US interest rates curbed investors' risk appetite.Brent crude futures settled at $62.56, while US West Texas Intermediate (WTI) crude finished at $58.06. For the week, Brent fell by 2.8% and WTI fell by 3.4%. Market sentiment turned bearish as Washington pushed for the Ukraine-Russia peace plan, even as sanctions on Russian oil producers Rosneft and Lukoil were set to take effect on Friday.Russia was the second-biggest producer of oil in the world after the US in 2024. Meanwhile, a stronger US dollar also weighed on oil prices. The greenback hit a six-month high versus a basket of other currencies, making dollar-priced oil more expensive for many global buyers.GasAsian spot liquefied natural gas (LNG) prices rose slightly this week but remained around the $11 area on well-stocked inventories and weak demand. The average LNG price for December delivery into northeast Asia held at $11.66 per million British thermal units (mmBtu), industry sources estimated.Asian spot gas prices built up their premium to European gas prices for near months at the TTF hub, mainly to account for an increase in spot charter rates that meant drawing cargoes over longer distances to Asia rather than Europe would cost more. In Europe, Dutch and British gas prices edged lower on Friday as expectations of stronger wind power output and warmer temperatures curbed gas demand.Prices rose earlier last week as a cold spell drove heating demand higher. The Dutch TTF price settled at $10.20 per mmBtu, recording a weekly loss of 3.4%.

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.”

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.”

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.