Oil prices slipped in Asian trading on Tuesday, weighed down by persistent fears of an oversupplied market that eclipsed both optimism over a potential resolution to the U.S. government shutdown and uncertainty surrounding new U.S. sanctions targeting Russia’s Rosneft and Lukoil.

By 07:17 GMT, Brent crude futures declined 27 cents, or 0.4%, to $63.79 a barrel, while U.S. West Texas Intermediate (WTI) was down 27 cents, or 0.5%, at $59.86. Both benchmarks had gained about 40 cents in the prior session.

Markets welcomed signs of progress in Washington, where the Senate approved a compromise bill to reopen the government — the longest shutdown in U.S. history. The measure now awaits approval in the House of Representatives, and Speaker Mike Johnson said he hopes to pass it as soon as Wednesday.

However, the positive sentiment was overshadowed by a rising glut of global crude.

“As OPEC production increases grind on, global oil balances are acquiring an increasingly bearish hue on the supply side of the ledger with demand still trending lower in conjunction with a slowed economic growth path among major oil-consuming countries,” analysts at Ritterbusch and Associates wrote in a note.

Earlier this month, OPEC+ agreed to raise December output targets by 137,000 barrels per day, keeping pace with increases from October and November, and decided to pause production hikes in the first quarter of next year.

The growing surplus has pressured prices in recent weeks, though markets remain alert to the potential fallout from U.S. sanctions on Russia’s top oil firms. ANZ analysts noted that the latest measures by President Donald Trump’s administration could heighten market volatility.

According to Reuters, Lukoil declared force majeure at Iraq’s West Qurna-2 oil field, while Bulgaria is reportedly preparing to seize the company’s Burgas refinery, marking the most significant repercussions yet from the recent sanctions.

Meanwhile, analysts observed that the volume of oil stored on tankers in Asian waters has doubled in recent weeks, reflecting weaker Chinese demand due to import quota limits and reduced Russian exports following tighter Western sanctions. Some Chinese and Indian refiners have shifted sourcing toward Middle Eastern suppliers.

A key uncertainty for the oil outlook, Ritterbusch added, “is the extent to which China will continue to push Russian supplies into strategic stockpiles and whether India will succumb to Trump’s suggestions that the country defer further purchases from Russia.”

Brent Oil price

Crude Oil price

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