2025.01.22

Trump's Energy Emergency Announcement Sends Oil Prices Plummeting

Oil prices dropped after Trump announced a national energy emergency, hinting at higher U.S. oil output. (Brent crude settled down at $79.29 per barrel. U.S. West Texas Intermediate crude futures (WTI) $75.89 ) He is also considering imposing tariffs on Canada and Mexico. The U.S. may stop purchasing Venezuelan oil, which could lead to oversupply in a market already struggling with weak demand. Despite the president's plans to refill oil reserves, analysts doubt it will have any impact on demand. The potential easing of shipping disruptions in the Red Sea also contributed to the decline in oil prices.

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Trump Administration Considers Halting Oil Imports from Venezuela

Trump plans to stop buying oil from Venezuela and considers the country a mess. The U.S. is imposing new sanctions on Maduro's government, despite increased oil exports from Venezuela. Both Trump and Biden have been tough on Maduro, aiming to weaken the Venezuelan economy. Trump's envoy for special missions, Richard Grenell is meeting with Venezuelan opposition officials but no major breakthrough has been made.

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India to Increase Purchases of U.S. Oil and Gas Following Trump's Energy Production Push

India is likely to increase its purchases of U.S. oil and gas following President Trump's announcement to maximize American energy production. India's Oil Minister stated that there is potential for more energy trade between the two countries, welcoming more U.S. energy into the market. Trump declared a national energy emergency and plans to export American energy worldwide. Indian refiners, heavily reliant on imported oil, have been impacted by rising global oil prices and shipping rates due to sanctions on Russian oil. Despite this, India is not facing an oil shortage. As a result of U.S. sanctions on Russia, India is turning back to traditional Middle East oil sources after becoming the top buyer of discounted Russian oil.

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VLCC Term Market Faces Challenges Amid Hesitant Charterers and Weakening Paper Market

The VLCC term market faced challenges as charterers grew hesitant about high spot rates. Braemar reported failed deals as paper market weakened, despite rates initially reaching $50,000 per day. Despite failed deals, sentiment remained positive in the market. Some notable failed deals included Energifonden Sverige and Njord Shipping’s Agneta Pallas III and Trafigura's Landbridge Glory. Mercuria also faced setbacks with the Olympic Trophy and Felice deals falling through. Aframaxes saw increased enquiry levels, with Trafigura paying $33,000 per day for Palamas and Sparto, while Mercuria booked Safeen Strength at $35,000 per day. Suezmaxes struggled with low fixing interest and bid levels. Overall, the market remained optimistic despite challenges in the VLCC term market.

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N2 Tankers Expands Aframax Tanker Fleet with Addition of Eco-friendly Southern Respect

N2 Tankers, a joint venture between Japanese shipowner Nissen Kaiun and Germany's Reederei Nord, has expanded its aframax tanker fleet by adding the 115,000-dwt Southern Respect. This newbuilding, equipped with eco features and scrubbers, is the 11th vessel under N2 Tankers' control. The ship was delivered directly from Sumitomo Heavy Industries in Japan and has already set sail to load its first cargo bound for Argentina. Nissen Kaiun is set to deliver more aframaxes to N2 Tankers in the coming years to replace existing ships in the fleet. N2 Tankers operates as a boutique aframax operator with a unique approach to working with charterers as it is owned and managed directly by its owners. The company has offices in Amsterdam and Singapore to handle operations in different regions, while technical management is overseen by Reederei Nord and Synergy Marine Group.

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US Sanctions Leave Putin Struggling to Export Russian Oil

US sanctions are causing a shortage of tankers for Russian oil exports, leading to a buildup of vessels at the Kozmino export terminal. If the trend continues, Russia may struggle to find enough ships to export its crude, with signs of further issues and buyers looking elsewhere for supplies. India and China are not handling sanctioned tankers, and a shortage of ships may eventually lead to export restrictions from Kozmino. The only sanctioned tanker to load Russian oil recently was the Li Bai, with other sanctions-free tankers also present. Analysts suggest that the situation may push freight rates higher.

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China's Crude Oil Imports Expected to Grow by Only 1% in 2025, According to CNPC Report

According to a report by China National Petroleum Corp (CNPC), China's crude oil imports are expected to grow by only 1% in 2025, with the country's reliance on oil imports remaining around 70% between 2026 and 2030. The country's refining industry is estimated to import 559 million metric tons of crude oil this year, with a projected increase in refinery throughput to 733.75 million metric tons. Additionally, demand for natural gas is expected to rise by 6.2% this year, reaching a record 448.5 billion cubic meters, with local gas production forecasted to increase by 2.9% per annum. China's dependence on natural gas imports is projected to decrease slightly to 45% by 2030. China is currently the world's largest importer of liquefied natural gas, with imports increasing by 7.7% last year to reach a three-year high of 76.65 million tons.