Oil prices declined in Asian trading on Tuesday, pressured by persistent oversupply worries that overshadowed both optimism about a potential end to the U.S. government shutdown and uncertainty surrounding new U.S. sanctions on Russian oil majors Rosneft and Lukoil.

By 07:17 GMT, Brent crude futures were down 27 cents, or 0.4%, to $63.79 a barrel, while U.S. West Texas Intermediate (WTI) slipped 27 cents, or 0.5%, to $59.86. Both benchmarks had added roughly 40 cents in the previous session.

The longest government shutdown in U.S. history could end this week after the Senate passed a funding compromise. The measure now heads to the House of Representatives, where Speaker Mike Johnson has expressed a desire to approve it by Wednesday.

Although the prospect of the government reopening has broadly lifted market sentiment, crude prices remain capped by growing concerns over global supply gluts.

“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 said in a note.

Earlier this month, OPEC+ agreed to raise December output targets by 137,000 barrels per day, maintaining the same pace as in October and November, while also deciding to pause production hikes during the first quarter of next year.

The sustained rise in OPEC output has reinforced a bearish tone among investors, though attention remains fixed on U.S. sanctions against Russian energy firms. ANZ analysts noted that the latest measures under President Donald Trump’s administration could further disrupt markets.

Sources told Reuters that Lukoil declared force majeure at Iraq’s West Qurna-2 oil field and that Bulgaria was preparing to seize the company’s Burgas refinery, marking the most significant fallout yet from sanctions imposed last month.

Meanwhile, analysts reported that oil stored on ships in Asian waters has doubled in recent weeks, as tighter Western sanctions reduced exports to China and India, while import quota limits curbed Chinese demand. Some refiners in both countries have shifted toward Middle Eastern and alternative suppliers.

One potential challenge to oil’s bearish outlook “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,” Ritterbusch added.

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