Brent loses momentum amid supply glut concerns

The front-month ICE Brent contract has lost by $0.16/bbl on the day, to trade at $64.07/bbl at 09.00 GMT.

IMAGE: Oil storage tanks. Getty Images

Upward pressure:

Brent crude has held some ground this week amid concerns of potential supply disruptions, as Western nations continue to tighten sanctions on Russia.

In October, the US Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned Rosneft and Lukoil, along with 34 of their subsidiaries.

Rosneft and Lukoil are Russia’s two largest oil producers, producing around 50% of the country’s total oil production, according to ING Bank’s head of commodities strategy, Warren Patterson.

“Successfully restricting these flows could dramatically change the outlook for the oil market,” Patterson said.

Downward pressure:

Eight members of the OPEC+ coalition have collectively decided to increase supply again by 137,000 b/d in December, marking the eighth consecutive month that the Saudi Arabia-led group has planned to hike production.

Saudi Arabia will produce around 10.1 million b/d in December – largely matching November’s figures. Russia will produce 9.6 million b/d, while Iraq and the UAE will produce 4.3 million b/d and 3.4 million b/d respectively, the OPEC secretariat said.

The decision has put downward pressure on Brent’s price, as signals of further supply additions typically pressure the market in an already oversupplied environment.

“For now, our balance sheet continues to show a significant surplus in 2026, which should keep downward pressure on prices,” Patterson added.

By Aparupa Mazumder

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