Crude oil prices edged lower on Monday, maintaining a volatile trading pattern. While Asian trading hours saw weakness following reports of Russia’s attacked port gradually resuming operations, European hours witnessed a rebound as geopolitical tensions kept market sentiment elevated. However, prices retreated again during the night session as broader financial markets turned risk-averse, ultimately closing slightly down.
Recent sanctions and attacks have significantly disrupted Russian exports. The U.S. plans to designate Venezuela’s Maduro-led drug trafficking group as a foreign terrorist organization, escalating military pressure. President Trump stated he would "not rule out any options" regarding Venezuela, while President Maduro emphasized the nation’s "non-transferable sovereignty." Meanwhile, armed clashes near Tripoli, Libya—just 35 km from key oil facilities—raised supply disruption concerns. As an OPEC member producing ~1.2 million barrels per day (mostly exported to Europe via Mediterranean ports), Libya’s instability continues counterbalancing oversupply pressures. Yet without clear signs reversing the oversupply narrative, investors remain hesitant to chase rallies, reinforcing wait-and-see sentiment.
As noted in Monday’s analysis, while structural oversupply naturally weighs on oil prices, factors like Russian sanctions, energy infrastructure attacks, and geopolitical risks inject uncertainty—partially offsetting downward pressure. This dynamic will likely sustain choppy price action in coming weeks. Given heightened volatility risks, especially from geopolitics, traders must carefully manage positioning.
**Daily Market Movements** - WTI crude fell $0.18 (-0.3%) to $59.91/barrel - Brent crude dipped $0.19 (-0.3%) to $64.20/barrel - INE crude rose 0.24% to ¥461.9/barrel
**Key Developments** 1. **FGE Analysis**: Crude’s "true value" sits at $70-80/barrel. Near-term prices may drop to $50-55 in 2026 before rebounding late 2026-2027. - Demand grows ~1 million bpd, but structure shifts: By 2025, 50% growth from non-refined fuels; by 2026, 80%; by 2030, total demand up 3.5 million bpd with refined fuels flat. - Peak demand likely in 2030s (Asia in 2040s), but supply faces challenges: Conventional fields decline 3-8% annually; shale declines exceed 15%. Without new investment, global capacity could shrink 5 million bpd yearly. - Geopolitical risks: Russia/Iran tensions pose major threats. Israel-Iran conflict could add $5-10 war premium; Hormuz Strait disruption may spike premiums to $20-40+.
2. **U.S.-Venezuela Tensions**: The U.S. plans to label Maduro’s drug network a terrorist organization (effective Nov. 24), even as Trump hinted at potential dialogue. Military assets are amassing in the Caribbean after months of lethal interdictions (80+ deaths). Trump stated no decisions were made but noted Venezuela’s willingness to talk. Maduro countered by asserting Venezuela’s sovereign rights and condemning "imperialist destabilization."
3. **India-U.S. LPG Deal**: India signed a landmark agreement to import 2.2 million tons/year of U.S. Gulf Coast LPG through 2026—covering ~10% of India’s annual imports. This advances India’s energy diversification and strengthens bilateral ties. Trade officials also signaled potential resolution of reciprocal tariffs, with some Indian agricultural exports gaining U.S. duty-free access.