Oil prices are under further downward pressure this week, with ICE Brent falling below $62/bbl, settling at its lowest level since late October. The Oil market is moving deeper into the expected Oil glut. Expect additional price pressure as we move into 2026, as discussed in our recently published outlook. However, Russian Oil supply remains a risk. While Russian seaborne export volumes are holding up well, these barrels are struggling to find buyers, ING's commodity experts Ewa Manthey and Warren Patterson note.

Rising Russian barrels at sea highlight mounting sanctions pressure

"So, we are seeing increasing volumes of Russian Oil at sea. Obviously, this is not sustainable. We need to see steeper discounts on Urals to attract buyers and/or Russian buyers, ensuring they are not dealing with sanctioned entities. If these fail, we will likely have to see Russian Oil output starting to fall. Our base case remains that Russia will find ways to work around the latest US sanctions. Russia has demonstrated an ability to keep Oil flowing since 2022 despite sanctions, embargoes and drone attacks."

"American Petroleum Institute numbers yesterday were supportive for crude, but bearish for refined products. US crude Oil inventories fell by 4.8m barrels over the last week, much more than the roughly 1.3m barrels decline the market expected. Refined products saw large stock builds. Gasoline and distillate inventories rose by 7m barrels and 1m barrels, respectively. If confirmed by the Energy Information Administration (EIA) later today, this would 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 high of 13.61m b/d in 2025. This is up slightly from a previous estimate of 13.59m b/d. Yet, the EIA expects Oil production to come under pressure next year, given the low price environment and the slowdown in drilling activity. The agency forecasts output to fall to 13.53m b/d in 2026, down from a previous 13.58m b/d."