Oil slipped as Russian flows expand, Iraqi output restored, and refined products drag market

Crude prices retreated on Monday as oversupply concerns deepened, weighed down by rising Russian shipments, restored Iraqi output, and persistent weakness in refined products.

Brent fell $1.26, or 1.98%, to $62.49 a barrel, while WTI eased $1.20, or 2%, to $58.88.

The market focus remained on Russia after President Vladimir Putin vowed to maintain “uninterrupted shipments” of crude and refined products to India despite tighter sanctions. Analysts noted that sustained flows from Russia could reinforce a global surplus through 2026, adding pressure on both benchmarks.

Refined products extended the bearish tone as gasoline futures in New York slipped around 2% after touching their lowest levels since May 2021 last week, while diesel prices weakened further in a broad decline across the energy complex.

In Iraq, production at the 460,000-barrel-per-day West Qurna-2 field resumed following pipeline repairs, removing early support and adding near-term supply.

Geopolitical developments offered little reprieve. Progress in Ukraine peace talks remained slow, and any breakthrough would likely enable additional Russian exports, potentially dragging prices lower. Traders also monitored US–Russia and US–Venezuela tensions, though oversupply worries continued to dominate sentiment.

The broader supply picture remained heavy, with additional barrels from OPEC+ and non-OPEC producers—including the United States, Brazil, and Guyana—reinforcing expectations of a prolonged surplus. Market participants are now awaiting upcoming monthly outlooks from the EIA, IEA, and OPEC for clearer signals on the 2026 supply–demand balance.

Written by: Aiman Haikal