Brent Breaks Below $60 on Oversupply Fears

Core Insights - Indian refiners continue to import Russian oil despite reports of halting imports, averaging 1.2 million barrels per day (b/d) in December, lower than the 1.75 million b/d average of 2025 [2] - Prices for Russia's Urals crude have decreased by $6 to $7 per barrel, but demand has improved, stabilizing the differential [3] - High freight costs are impacting Russian oil exports, with chartering costs for Aframax vessels to India rising to around $8 million, approximately 50% higher than early 2025 [4] Market Movers - TotalEnergies has agreed to sell 9.99% of its equity in the SK408 block offshore Malaysia to PTT while retaining a 30% stake and operatorship [5] - Shell is preparing a new drilling campaign in the PEL 39 block offshore Namibia starting April 2026, marking its return to the area after a write-down of the Graff discovery [5] Industry Developments - Neste has revised its 2035 carbon neutrality target, now pledging to cut greenhouse gas emissions by 80% by 2040 [6] - Ecopetrol has reduced its 2026 low-carbon budget by 60% to $225 million, citing a need for broader budget discipline [6] Market Sentiment - Weak Chinese macroeconomic data has influenced market sentiment, with industrial output dropping to its lowest since August 2024, leading to a decline in Brent futures below $61 and ultimately below $60 per barrel [7]