Core Insights - Torbjörn Törnqvist has acquired the overseas operations of Lukoil following U.S. sanctions against the Russian oil producer [1] Company Summary - The deal represents a significant opportunity for Törnqvist, indicating a strategic move to capitalize on Lukoil's international assets during a time of geopolitical tension [1]

Core Viewpoint - The sanctions imposed by U.S. President Donald Trump on two major Russian oil producers are expected to impact crude oil supply significantly [1] Group 1: Impact on Oil Supply - The sanctions on Russian oil companies, specifically Rosneft and Lukoil, will lead to delays in crude oil shipments and a slowdown in trade [1] - These two companies account for approximately 60% of Russia's crude oil supply, indicating a substantial potential disruption in the market [1] Group 2: Industry Reactions - Patrick Pouyanne, CEO of Total, highlighted the significant impact of these restrictions on oil supply during the Abu Dhabi International Petroleum Exhibition (Adipec) [1] - BP Plc's head, Murray Auchincloss, stated that the restrictions are substantial and are currently suppressing supply [1]

Core Insights - Oil prices remained stable amid bearish market sentiment following a U.S.-China trade truce, with Brent crude at $65.07/bbl and WTI at $60.92/bbl, reflecting slight declines from the previous week [1] Group 1: U.S. Sanctions and Indian Refiners - The Trump administration imposed new sanctions on Russian oil and gas companies Rosneft and Lukoil, coinciding with similar actions from the UK [2] - Indian refiners are increasingly avoiding Russian oil, opting for more expensive U.S. and Middle Eastern alternatives to mitigate risks associated with U.S. sanctions [2][3] - Over the past three years, India has benefited from discounted Russian crude, which was typically $8-$12 per barrel cheaper than Middle Eastern benchmarks, with imports peaking at approximately 1.75 million barrels per day [3] Group 2: Impact on Oil Imports and Prices - The share of Russian oil in India's import basket has decreased to 34% this year from 36% in the previous two years, while U.S. crude imports surged to 575,000 barrels per day in October, the highest in three years [4] - The sanctions have led to increased caution among banks regarding settlement channels, raising transaction risks for Indian refiners [4] - Following the sanctions, crude oil prices have risen sharply, raising concerns about supply tightness and inflation, which could negatively affect India's fiscal deficit and import bills [4] Group 3: Future Oil Price Trajectory - Commodity analysts at Standard Chartered suggest that the future trajectory of oil prices will depend on the volume of Russian oil removed from the market due to sanctions, with Rosneft and Lukoil having exported 1.9 million barrels per day over the past year [5]

Core Insights - Lukoil has accepted an acquisition offer from Gunvor Group for Lukoil International, which manages Lukoil's international assets, and both companies have agreed on the principal terms of the transaction, preventing Lukoil from negotiating with other buyers [1][3] Group 1: Transaction Details - The final agreement requires Gunvor to obtain permission from the US Office of Foreign Assets Control (OFAC) and other necessary licenses and permits in relevant jurisdictions [2] - The sale is being conducted under an OFAC wind-down license, with Lukoil seeking extensions if necessary to maintain uninterrupted operations of its international assets [2] Group 2: Market Context - The sale is a response to sanctions imposed on Lukoil and its subsidiaries due to Russia's war in Ukraine, marking a strategic move by the company to divest its international assets [3] - Gunvor was the largest trader of Russian oil in the 2000s and has expanded its portfolio by acquiring various energy assets amidst market volatility since the Ukraine conflict began [4] Group 3: Lukoil's Operations - Lukoil supplies crude oil to Hungary, Slovakia, and Türkiye's STAR refinery, which is owned by Azerbaijan's SOCAR, and holds interests in oil terminals and retail fuel networks across Europe [5] - The company operates upstream and downstream projects in Central Asia, Africa, and Latin America, indicating a diverse international presence [5]

Core Insights - Crude oil and gasoline prices experienced modest gains due to easing US-China trade tensions, which are expected to support economic growth and energy demand [1] - A decline in US crude inventories and gasoline supplies reaching an 11-month low contributed to the positive momentum in oil prices [2] - Strength in the global economy, indicated by Eurozone GDP growth and an improved Japan GDP forecast, is bullish for energy demand [3] Group 1 - The extension of the tariff truce between the US and China, along with the rollback of export controls, is expected to enhance energy demand [1] - The unexpected drop in weekly EIA crude inventories and the significant reduction in gasoline supplies have provided upward pressure on prices [2] - The Eurozone's Q3 GDP growth of +0.2% quarter-on-quarter and +1.3% year-on-year exceeded expectations, indicating stronger economic performance [3] Group 2 - Expectations of reduced Russian crude supplies due to US sanctions are supporting oil prices [4] - The US has implemented sanctions on major Russian oil producers, which is expected to limit their export capabilities [4] - Ukrainian attacks on Russian refineries have further constrained Russia's crude export capacity, with shipments dropping to 1.88 million barrels per day, the lowest in over 3.25 years [5]

Group 1 - The United States announced a new round of sanctions against Russia, focusing on two major oil companies: Lukoil and Rosneft, along with their 34 subsidiaries, prohibiting U.S. citizens and businesses from engaging in transactions with them [2] - The new sanctions align with recent measures from the UK and the EU, with the EU implementing its 19th round of sanctions against Russia, which includes a comprehensive ban on importing Russian liquefied natural gas and a trading ban on two state-owned oil companies [3] - The EU's latest sanctions have faced internal skepticism, particularly from countries like Hungary and Slovakia, which have raised concerns about the impact on economic competitiveness and energy prices rather than continuing sanctions against Russia [3][4] Group 2 - Russia has implemented countermeasures in response to the EU's sanctions, leading to ongoing doubts about the effectiveness of these sanctions within the EU [4]

Company Acquisition - Lukoil has accepted an offer from Gunvor to buy its Lukoil International unit [1] Industry Dynamics - The deal involves a sanctioned Russian oil producer, indicating potential complexities and scrutiny [1]

Core Viewpoint - The United States has announced a new round of sanctions against Russia, specifically targeting two major oil companies: Lukoil and Rosneft, along with their subsidiaries [2]. Group 1: Sanctions Details - The sanctions include Lukoil and Rosneft, along with 34 of their subsidiaries, which are involved in oil and gas exploration, extraction, and development [2]. - U.S. citizens and companies are prohibited from engaging in transactions with these companies, and any entity that is more than 50% controlled by them will also be automatically restricted [2]. Group 2: International Coordination - This round of sanctions aligns with measures previously announced by the UK on October 15 and the EU on October 23, which include a ban on short-term contracts for importing Russian liquefied natural gas starting in April 2026, and a comprehensive long-term ban starting in 2027 [2].

Report Overview - Report Title: Crude Oil and Refined Oil Morning Report - Report Date: October 30, 2025 - Research Team: Energy and Chemicals Team of the Research Center 1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - This week, oil prices rebounded significantly, with Brent crude closing above $65. The US imposed sanctions on major Russian oil producers, and India's Reliance Group will stop importing Russian oil under long - term agreements, which may lead to a near - zero supply of Russian oil to India in the short term. The reduction in Russian crude exports still needs to be evaluated, but Indian purchases have supported the Dubai market in the short term [6]. - Geopolitical concerns were triggered by the US's controversial military strike on Venezuelan transportation. Fundamentally, as of October 17, EIA crude oil inventories decreased by 961,000 barrels, US refinery operations rebounded, and the US Energy Department announced a tender to buy 1 million barrels of crude oil for the strategic reserve. Gasoline and diesel inventories decreased, showing a warming in fundamentals [6]. - Due to concerns about India's diesel exports, the crack spreads of European and American diesel strengthened, but the inventory of Singapore diesel increased by more than 5 million barrels, reaching a 243 - week high, suppressing the global diesel crack spread. In the short term, oil prices may rebound and fluctuate more, and in the medium term, the upside space of oil prices is limited due to Kuwait's statement that OPEC is ready to increase production. The oversupply situation in the fourth quarter continues, and caution is advised when chasing high prices [6]. 3. Summary by Related Catalogs 3.1 Oil Price Data - From October 23 to October 29, WTI crude oil prices changed from $61.79 to $60.48, with a change of $0.33; Brent crude oil prices changed from $65.99 to $64.92, with a change of $0.52; Dubai crude oil prices changed from $65.24 to $64.86, with a change of - $0.08 [3]. - SC crude oil prices changed from 459.70 to 462.60, with a change of - 0.10; Oman crude oil prices changed from $68.44 to $64.95, with a change of $0.17 [3]. - Japanese naphtha CFR prices changed from $573.13 to an unspecified value, with a change in the differential to Brent of - $1.32; Singapore fuel oil 380 CST changed from a - $0.73 discount to a - $1.8 discount to Brent, with a change of - $0.65 [3]. 3.2 Daily News - On October 29, the US announced a new round of sanctions against Russia, targeting two major oil companies, Lukoil and Rosneft, and their 34 subsidiaries. This is in line with the sanctions previously announced by the UK and the EU [3]. - The US Treasury issued a license for Rosneft's German subsidiaries. Russia's current crude oil exports are in line with the October plan and have not been affected by the new sanctions, but India's HMEL company has suspended further purchases of Russian crude [4]. 3.3 Regional Fundamentals - The comprehensive profit of local refineries decreased, with profits oscillating downward [6]. 3.4 Weekly Viewpoints - Short - term: Indian purchases will continue to support the Dubai market. Oil prices may rebound and have increased volatility risks [6]. - Medium - term: The reduction in Russian oil supply will be affected by multiple factors and will impact the oil price center in Q4 and Q1 of 2026 (a range of $5 - 10). The upside space of oil prices is limited due to OPEC's potential production increase, and the oversupply situation in the fourth quarter continues [6]. 3.5 EIA Data - For the week ending October 24: US crude oil exports increased by 158,000 barrels per day to 4.361 million barrels per day; domestic crude oil production increased by 15,000 barrels to 13.644 million barrels per day; commercial crude oil inventories (excluding strategic reserves) decreased by 6.858 million barrels to 416 million barrels, a decrease of 1.62%; strategic petroleum reserve (SPR) inventories increased by 533,000 barrels to 409.1 million barrels, an increase of 0.13%; commercial crude oil imports (excluding strategic reserves) decreased by 867,000 barrels per day to 5.051 million barrels per day [18]. - The four - week average supply of US crude oil products was 20.753 million barrels per day, a decrease of 0.91% compared to the same period last year [18].

Core Viewpoint - The United States has announced a new round of sanctions against Russia, specifically targeting major oil companies, including Lukoil and Rosneft, along with their 34 subsidiaries [2] Group 1: Sanctions Details - The sanctions focus on the oil and gas exploration, extraction, and development sectors [2] - U.S. citizens and businesses are prohibited from engaging in transactions with the sanctioned entities, and any entity with over 50% ownership by these companies is also automatically restricted [2] Group 2: International Coordination - This round of sanctions aligns with measures previously announced by the UK on October 15 and the EU on October 23 [2] - The EU's measures include a ban on short-term contracts for importing Russian liquefied natural gas starting April 2026, with a complete ban on long-term contracts set to take effect in 2027 [2]