Key Developments in Global Oil Markets Amid Geopolitical Shifts
Russian Presidential Aide Yuri Ushakov confirmed that President Vladimir Putin discussed Ukraine’s potential NATO membership with U.S. representatives during recent talks on a proposed "peace plan." While details remain confidential, the dialogue touched on post-conflict international recognition of agreements involving Ukraine. Ushakov emphasized that Russia hopes military successes will prompt a "more realistic stance" from Europe and Kyiv. Notably, Ukraine has withdrawn from the Istanbul process, leaving Russia and the U.S. as the primary negotiators.
U.S. President Donald Trump described the meeting between his envoys (including Jared Kushner) and Putin as "quite productive," though outcomes remain undisclosed. Meanwhile, Ukrainian President Volodymyr Zelensky announced preparations for new talks with U.S. representatives, with NATO allies pledging $1 billion in military aid via the Priority Requirements for Ukraine (PURL) mechanism.
**Black Sea Tensions and Supply Dynamics** Turkey and NATO held security consultations following attacks on Russian cargo ships in the Black Sea, including two oil tankers near Novorossiysk. Despite U.S. pressure, Venezuela’s November oil exports rose 3% month-on-month to 921,000 barrels per day (bpd), with shipments to the U.S. increasing to 150,000 bpd.
**Oil Price Volatility and Market Outlook** Geopolitical de-escalation triggered a pullback in crude’s risk premium, with China’s SC crude futures dropping 1.15% to 448.1 yuan/barrel, ending a six-day rally. Analysts highlight three key bearish factors: 1. Progress in Russia-Ukraine talks may revive sanctioned Russian oil supplies. 2. Weakening U.S. military threats against Venezuela reduces supply disruption risks. 3. Global inventories continue climbing amid tepid Asian demand.
Guotai Junan Futures analyst Huang Liunan warned that Brent crude could retest $50/barrel if Russian supply returns, while Cinda Futures’ Fu Xinwei noted OPEC+ output policies remain the dominant price driver. OPEC+ recently extended Q1 2026 production cuts, but Everbright Securities’ Du Bingqin cautioned that actual supply exceeds targets by 2%, with floating storage up 44.44 million barrels since September.
Long-term pressures persist: OPEC+ output hikes and non-OPEC production growth may sustain oversupply through 2026, potentially driving prices below April 2025 lows. While Fed rate cuts could offer short-term support, fundamentals and Ukraine negotiations will dictate the trend.
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