Oil ticked lower as signs that activity had resumed at a key Russian port were countered by wider geopolitical risks to prices.
West Texas Intermediate fell 0.3% to settle below $60 a barrel after adding more than 2% on Friday following an attack on Russia’s Novorossiysk facility. Two tankers moored on Sunday at the port, indicating operational activity. The dollar strengthened, making commodities priced in the currency less attractive.
The attack on Novorossiysk by Ukrainian forces, along with Iran’s seizure of an oil tanker near the Strait of Hormuz, injected a fresh geopolitical premium into prices as the market faces pressure from an emerging global surplus.
Traders are also monitoring the Trump Administration’s plans in oil-rich Venezuela. US President Donald Trump said on Monday he is not ruling out sending troops to the South American country and said he is willing to talk to counterpart Nicolas Maduro. Elsewhere, crude oil exports from Sudan were disrupted after a series of attacks hit energy facilities in the country, which serves as a key conduit for crude from landlocked South Sudan.
Those risks are countering moves by OPEC+ and producers from outside of the group to ramp up output. The increases leave most traders expecting a significant surplus over the coming months.
“Brent crude oil prices continue to fluctuate in a $60-$70 a-barrel range, with the market focus shifting to how Russian oil exports will evolve over the coming months,” UBS analyst Giovanni Staunovo wrote in a note. “The market appears skeptical that Russia will struggle to export its oil barrels.”
Moscow’s oil has begun to trade at a significant discount in recent days as the deadline nears for fresh sanctions on its two major producers to kick in. Prices are at the lowest level in over two-and-a-half years, according to Argus Media data.
With sanctions looming, the fate of the global assets belonging to Lukoil PJSC, a leading Russian oil producer, remains a key question. Chevron Corp. is studying options to buy those assets, according to Reuters.
Meanwhile, refinery margins have surged as relentless attacks on Russia’s energy infrastructure, outages at key plants in Asia and Africa, and permanent closures across Europe and the US cut diesel and gasoline supplies. Speculators last week had their biggest outright bullish positioning on Europe’s diesel benchmark since 2022.
Oil Prices
WTI for December delivery fell 0.3% to settle at $59.91 a barrel in New York.
Brent for January settlement dropped 0.3% to settle at $64.20 a barrel.
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