Drone Strike Impacting Exports: Kazakhstan's oil exports could drop by 30% for up to two months due to damage from a Ukrainian drone attack on the Caspian Pipeline Consortium (CPC) pipeline in Russia. The attack caused significant damage to the Kropotkinskaya station, a key pumping station in the region, affecting oil transport from Kazakhstan to global markets. The strike is seen as a blow to U.S. companies involved in the CPC, including Chevron and Exxon Mobil, and could disrupt oil prices. While the pipeline continues to operate at reduced capacity, it is expected to take up to two months to fully repair the damage.

Saudi Crude Exports: Saudi Arabia's crude oil exports fell by 1% in December, dropping to 6.146 million barrels per day (bpd) from 6.206 million bpd in November, according to JODI data. The country's oil production also declined to 8.905 million bpd, the lowest since June 2024. Meanwhile, Saudi refineries increased their crude through put by 0.189 million bpd, reaching 2.543 million bpd. Additionally, direct crude burning dropped to 279,000 bpd, the lowest level since January 2021.

U.S. 5th Largest India Supplier: India's oil imports from the United States surged in January, reaching 218,400 barrels per day (bpd), up from 70,600 bpd in December, making the U.S. the fifth largest oil supplier to India. As part of its strategy to increase energy purchases, India plans to boost its imports from the U.S. to $25 billion, up from $15 billion last year. Imports from Russia also rose by 4.3% to 1.58 million bpd, but this may decline due to the impact of U.S. sanctions on Russian oil. Meanwhile, imports of Middle Eastern oil increased by 6.5%, reaching 2.7 million bpd, with Iraq, Saudi Arabia, and the UAE remaining key suppliers.

Market Overview: Oil prices remained steady to start the morning on Tuesday as early gains faded amid uncertainty over Ukraine-Russia peace talks, trade tariffs, and OPEC+ output decisions. WTI crude edged up to $71.25 per barrel after the U.S. holiday break. Talks between U.S. and Russian officials in Riyadh introduced new demands from Moscow, while a Ukrainian drone attack on a Russian pipeline threatened supply disruptions. Meanwhile, speculation continues over whether OPEC+ will delay planned production increases in April.

The United States remains the world's top crude oil producer, with production reaching 13.2 million b/d in 2024 due to improved efficiency. Growth is expected to continue, with U.S. petroleum liquids production increasing by 0.6 million b/din 2025 and 0.5 million b/d in 2026, largely driven by the Permian region. Canada, the fourth-largest oil producer, is set to increase output by 0.3 million b/d in 2025 and 0.2 million b/d in 2026, supported by the Trans Mountain Pipeline expansion. Brazil’s production will rise with new FPSO units in the Santos Basin, adding 0.1 million b/d in 2025 and 0.2 million b/d in 2026. Guyana’s petroleum output is also set to grow, with the Yellowtail project boosting production by 0.2 million b/d in 2025 and 0.1 million b/d in 2026.  

Oil prices climbed on Tuesday as supply concerns intensified following a Ukrainian drone attack on a key Russian oil pipeline, potentially cutting Kazakhstan's export volumes by 30%, according to Transneft. U.S. West Texas Intermediate (WTI) crude rose $1.11, or 1.6%, to $71.85 a barrel, while refined products slipped, with heating oil down -0.0212 and gasoline falling -0.0032. Traders are also monitoring U.S.-Russia talks on ending the Ukraine war, which could impact Russian oil flows if sanctions ease. Meanwhile, OPEC+ production plans remain in focus, with uncertainty around whether the group will proceed with an expected supply increase in April. U.S. inventory data will be delayed by one day this week due to the President's Day holiday.