Oil rebounded as US-Hungary talks revive hopes for Russian crude, but oversupply fears linger

Crude prices rebounded on Friday after slipping earlier in the session, as optimism grew that Hungary could continue importing Russian oil following a meeting between US President Donald Trump and Hungarian Prime Minister Viktor Orban at the White House. While the exemption is still subject to final implementation, the development eased short-term concerns over potential supply disruptions.

Brent crude settled 25 cents higher at $63.63 a barrel while WTI rose 32 cents to close at $59.75 a barrel. Despite the modest recovery, both benchmarks were still on track for weekly losses of around 2%, weighed down by rising global output.

Hungary’s continued reliance on Russian energy—accounting for over 90% of its crude imports—has drawn criticism from EU and NATO members since the outbreak of the Ukraine conflict in 2022. Market participants said hopes for flexibility in Hungary’s crude sourcing helped stabilize sentiment late in the session.

Meanwhile, supply growth remains a central pressure point. Crude output from both OPEC+ and non-member producers is expected to climb through the end of the year and into 2026, with the International Energy Agency forecasting a record global surplus. Saudi Arabia also reduced prices for Asian buyers in December, reflecting ample market availability.

Floating cargoes are beginning to reflect higher volumes, while onshore US inventories rose slightly by 5.2 million barrels at the end of October, limiting immediate price support. Analysts note that the market continues to weigh geopolitical uncertainty and supply dynamics against mixed macroeconomic signals, including slowing demand from the US aviation sector and continued elevated imports by China.

Written: Farid Muzaffar