Oil drops as Russian port resumes exports

WTI crude oil futures fell more than 1% to around $59.4 per barrel on Monday, trimming much of the prior session’s advance after Russia’s Novorossiysk port resumed operations.

The key Black Sea export hub had been shut for two days following a Ukrainian drone strike, raising short-lived concerns about potential supply disruptions. Fresh reports indicated that two crude tankers were already moored at the port on Sunday, suggesting that terminal activity was returning to normal and easing immediate fears of a prolonged outage.

The earlier disruption at Russia’s second-largest oil export facility had helped lift crude more than 2% on Friday, allowing prices to finish the week in positive territory despite broader market softness.

Adding to geopolitical uncertainty, President Trump said on Sunday that Republicans are preparing legislation to sanction any country that continues to trade with Russia, a move that could significantly expand secondary sanctions. He also suggested that Iran could be included in future measures, raising the prospect of tighter restrictions on global oil flows, though markets reacted cautiously given the lack of specifics and the lengthy legislative process such actions would require.

Despite these geopolitical developments, the broader outlook for the oil market remains decidedly bearish.

Analysts continue to warn of a growing supply glut later this year and into next, as both OPEC and non-OPEC producers ramp up output, including expected increases from the US, Brazil, and Guyana.

At the same time, demand growth is slowing, weighed down by sluggish industrial activity in Europe, fading post-pandemic recovery momentum in parts of Asia, and persistent concerns about a cooling US economy. Inventory builds across major consuming regions and weakening refinery margins further underscore the market’s challenges.

Overall, while geopolitical flare-ups may trigger short-term price volatility, the structural imbalance between rising supply and softening demand continues to anchor bearish sentiment in the crude market.