November 11, 2025.
There is a decline in the prices of crude oil, due to the uncertainties in the global commodities market that has refused to fizzle out. The oil market activities are currently hanging between rising US crude oil inventories and supply tightening following export sanctions on Russia
US inventories surge, and floating storage in Asian waters has doubled in recent weeks as tighter Western sanctions curb imports to China and India.
Even after Russia’s Lukoil declared force majeure on its operations in one of Iraq’s biggest oil fields because of the latest U.S. sanctions, oil prices are tracking lower on Tuesday.
Brent dropped to $63.84 per barrel, with West Texas Intermediate selling at $59.89 per barrel, as reports suggest record high volumes of oil in floating storage.
There’s decline in prices as excess supply fear now outweighed uncertainty over the impact of U.S. sanctions on Russian oil majors Rosneft and Lukoil.
More also that to replace sanctioned Russian supply, Indian refiners have shifted toward sourcing barrels from the Middle East and the Americas.
READ MORE; OPEC+ Raises Oil Output By 137,000 bpd
US President Donald Trump had in October, placed Lukoil, Russia’s second-largest oil producer, and its subsidiaries under sanctions, citing a “serious lack of commitment” to the peace process aimed at ending the war in Ukraine.
On October 27, Lukoil, which accounts for about 2% of global oil output, said it would divest its international assets in response to the US move.
The company announced on Oct. 30 that it had reached a deal to sell its holdings to Gunvor Group, but the US Treasury Department declined to approve the transaction, prompting Gunvor to withdraw its offer.
According to the Energy Information Administration, EIA, Oil prices drop last week, were primarily driven by renewed oversupply concerns, after U.S. crude inventories rose 5.2 million barrels, far exceeding expectations.
The build was attributed to higher imports and reduced refinery activity. Meanwhile, ongoing Western sanctions on Russia and Iran have led to record volumes of oil being stored at sea, disrupting trade patterns but mitigating the immediate risk of a global supply glut.
Traditional supply channels, remained tightened due to the U.S. embargo on Rosneft and Lukoil adding volatility to the current market sentiment.
READ MORE; IEA Reviews Oil Demand Forecast Down By 35,000 bpd
Following a meeting between U.S. President Donald Trump and Hungarian Prime Minister Viktor Orban at the White House, there was a brief rebound of crude prices from a midday dip last week amid mild optimism that Hungary would be permitted to maintain access to Russian crude.
In the near term, crude prices are expected to face sustained downward pressure as elevated U.S. inventories signal weakening refinery demand amid market oversupply.
However, the tightening impact of sanctions on Russia’s Rosneft and Lukoil, alongside continued logistical disruptions from Iran’s export constraints, should temper a deeper correction.
Market sentiment will likely hinge on the pace of destocking and clarity around Europe’s stance on Russian crude exemptions, particularly following Hungary’s negotiations.
Meanwhile, the OPEC+ alliance have agreed to raise output slightly in December, but to avoid flooding the market, paused further hikes through the first quarter.
