Oil prices are under further downward pressure this week, with Brent crude on the Intercontinental Exchange falling below $62 a barrel, settling at its lowest level since late October. The oil market is moving deeper into an expected oil glut. Expect additional price pressures as we move into 2026, as discussed in our recently published forecasts. However, Russian oil supplies remain a risk. While the volume of Russian seaborne exports is holding up well, these barrels are struggling to find buyers, ING commodities experts Ewa Manthey and Warren Patterson point out.
The rise of Russian barrels into the sea highlights the growing sanctions pressure
“So, we are seeing increasing amounts of Russian oil at sea. This is clearly not sustainable. We need to see deeper discounts on the Urals to attract Russian buyers and/or buyers, and ensure they do not do business with sanctioned entities. If these fail, we will likely see Russian oil production start to decline. Our rule of thumb remains that Russia will find ways around the latest US sanctions. Russia has demonstrated its ability to keep oil flowing since 2022 despite sanctions, embargoes and drone attacks.”
“Yesterday’s API numbers were supportive for crude oil, but bearish for refined products. US crude oil inventories fell by 4.8 million barrels over the past week, much more than the 1.3 million barrel decline the market expected. Refined products saw a significant increase in inventories. Gasoline and distillate inventories rose by 7 million barrels and 1 million barrels, respectively. If the EIA confirms later today, this will be the largest gasoline build since late December 2024.”
“The EIA published its latest short-term energy outlook yesterday, estimating that US crude oil production will reach a record 13.61 million barrels per day in 2025. This is slightly higher than the previous estimate of 13.59 million barrels per day. However, the EIA expects oil production to come under pressure next year, given the low price environment and slow drilling activity. The agency expects production to decline to 13.53 million barrels per day in 2026. Down from The previous figure was 13.58 million barrels per day.”
