Ukraine-Russia peace impasse keeps Brent steady

The front-month ICE Brent contract has edged $0.24/bbl higher on the day, to trade at $63.26/bbl at 09.00 GMT.

IMAGE: Amiral petrochemical complex integrated with Saudi Aramco and TotalEnergies’ SATORP refinery in Saudi Arabia. TotalEnergies

Upward pressure:

Brent has inched up by $0.38/bbl on the week, holding mostly steady as a potential stalemate in the Russia-Ukraine peace talks has fuelled fears of a supply squeeze.

“The peace plan presented to Russia and Ukraine presents the single biggest variable to the outlook for the oil market,” Daniel Hynes, senior commodity strategist at ANZ Bank, said.

Refinery downtime in the Middle East is projected to average 880,000 b/d in the fourth quarter of 2025, up sharply from 340,000 b/d in the third, according to Kpler’s September 2025 refinery-status update.

Planned maintenance at Saudi Arabia’s SATORP and SASREF and Kuwait’s Mina Abdullah refineries is estimated to bring refinery crude runs down to around 8.6 million b/d, tightening regional product output, Kpler reported.

This crowded maintenance cycle, combined with an ongoing outage at Kuwait’s Al Zour refinery and persistent uncertainty around Nigeria’s Dangote refinery, has further compounded fears of a global supply crunch, energy market analyst Phil Flynn said.

“There’s certainly no sign of an oil surplus in the market right now!” he argued.

Downward pressure:

Market concerns that China’s oil demand could remain muted into 2026 loom large and can act as a headwind for Brent.

Tepid domestic growth, tariff tensions with the US and an accelerating shift toward electrification in transport could weigh on Chinese oil demand by mid-2026, Janet Kong, chief executive of Singaporean refiner Hengli Petrochemical International, told Bloomberg at a conference.

Trafigura’s chief economist Saad Rahim echoed the outlook in remarks to the Financial Times (FT) at the same event. “Next year we have one of the lowest growth rates in China in quite some time,” he told FT, adding that India could even outpace China in oil demand growth.

By Konica Bhatt

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