Oil prices experienced a slight drop following indications that activity had resumed at the critical Russian port of Novorossiysk on the Black Sea. This development comes after a Ukrainian strike last week caused some damage and led to a temporary suspension of operations. Brent crude slipped below $US64 a barrel, while West Texas Intermediate fell towards $US59.
Two tankers were seen moored at Novorossiysk on Sunday, signalling a return to operational activity at the terminals. Reuters also reported that crude loading had recommenced. The attack on the Russian port and Iran’s seizure of a tanker near the Strait of Hormuz had previously injected a geopolitical premium into prices, contributing to a modest weekly gain for oil.
Despite these geopolitical factors, the oil market continues to face a substantial surplus. Increased output from OPEC+ and producers outside the group is putting a cap on potential price gains. Globally, refinery margins have surged due to ongoing attacks on Russia’s energy infrastructure, outages at key plants in Asia and Africa, and permanent closures across Europe and the US, which have collectively reduced diesel and petrol supply.
In other news, Serbia has expressed its willingness to pay a premium to regain control of its only oil refiner, NIS AD, as it seeks to shield the Russian-owned company from US sanctions. NIS AD, Serbia’s only oil refiner, is currently owned by Russian interests. Its owners are reportedly in discussions with potential investors from Asia and Europe regarding a possible takeover.
