Oil prices rise as sanctioned crude piles up at sea

Oil futures climbed this week as traders weighed the risk of supply disruptions amid tensions between the US and Iran and uncertainty over the war in Ukraine after talks in Geneva ended without a breakthrough. On Wednesday prices ended more than 4% higher; early Thursday US West Texas Intermediate traded around $65.30 per barrel and Brent near $70.50 per barrel.

Both grades are about 15% higher this year after three straight years of decline. Much of the apparent global surplus has shown up as sanctioned crude lingering offshore rather than in key land-based storage hubs. Goldman Sachs estimates the market ran a surplus of roughly 1.5 million barrels per day in 2025, yet sanctioned inventories on water have risen by about 130 million barrels from a year earlier to roughly 375 million barrels.

Tankers moving Russian, Iranian, and Venezuelan oil have used “dark fleet” and shadow shipping tactics to evade sanctions, keeping cargoes at sea and away from pricing centers such as the US Gulf Coast and Northwest Europe.

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