Oil Prices Dip as Russian Port Reopens

Novorossiysk Loadings Resume, Temporarily Calming Global Supply Concerns

Oil prices edged lower on Monday following the resumption of crude loadings at Russia’s key Novorossiysk port, reducing immediate fears of global supply disruptions. The decline comes after a strong rally late last week driven by heightened geopolitical tensions and attacks on Russian energy infrastructure.

Brent and WTI Retreat After Gains

At 09:35 GMT on Monday:

• Brent crude futures for January delivery dropped by 0.7% to $63.97 per barrel
• West Texas Intermediate (WTI) crude also fell 0.7% to $59.52 per barrel

The dip follows a more than 2% surge on Friday, triggered by a Ukrainian attack on Novorossiysk and the Caspian Pipeline Consortium terminal. The assault had briefly halted exports, affecting around 2% of the global oil supply.

Crude Loadings Restart at Novorossiysk

Tanker tracking data confirmed over the weekend that loadings had resumed at Novorossiysk. This relieved some immediate pressure on the oil market, but concerns remain over longer-term supply risks as military activity intensifies.

• Ukraine reportedly attacked Russia’s Ryazan refinery on Saturday.
• Another strike targeted the Novokuibyshevsk refinery in the Samara region on Sunday.

These developments suggest a sustained threat to Russian oil infrastructure, which could influence energy markets if further escalations occur.

Sanctions and Geopolitical Tensions Add Pressure

In addition to military action, the market is closely watching U.S. sanctions. New restrictions are set to take effect after 21 November, prohibiting companies from doing business with Russian oil giants Lukoil and Rosneft.

This is forcing traders to unwind contracts, creating potential for stranded supply and logistical disruptions.

According to analysts at ING:

"While the oil market is expected to remain in a large surplus through 2026, growing geopolitical tensions are amplifying supply risks."

Other flashpoints include the Gulf of Oman, where Iran recently seized an oil tanker. The tanker had transited the Strait of Hormuz, a critical chokepoint through which roughly 20 million barrels per day are shipped—around one-fifth of global oil trade.

Market Positioning: Traders Take Cautious Stance

Speculators increased their net long positions in ICE Brent futures by 12,636 contracts to 164,867 lots in the past reporting week. Much of this activity was attributed to short covering, reflecting traders’ reluctance to hold bearish positions amid rising uncertainty.

What This Means for the Oil Market and Investors

While the immediate risk to global oil supply has eased with the reopening of Novorossiysk, the underlying geopolitical situation remains volatile. Continued attacks on refineries, escalating sanctions, and tension in the Middle East could all reignite supply fears.

If these risks intensify, oil prices could rebound sharply—especially if any further disruption impacts key routes like the Strait of Hormuz.

For investors:

• Volatility in energy stocks may persist
• Oil-linked ETFs and futures contracts could see increased activity
• Energy companies with diversified supply chains may fare better

Final Thoughts

The recent dip in oil prices appears to be a temporary breather. With sanctions tightening and geopolitical risks brewing, the outlook for crude remains highly sensitive to global events.

Stay informed and expect continued fluctuations as markets weigh immediate relief against looming supply threats.

Sources: (Investing.com, Reuters.com)