2025.01.24

Oil Prices Hold Steady Despite Uncertainty over Trump's Tariffs and Energy Policies

Oil prices held steady despite uncertainties over Trump's tariffs and energy policies affecting global economic growth and demand. Brent crude futures rose slightly to $79.18, while U.S. West Texas Intermediate crude climbed to $75.58. Factors like expected U.S. production increase and easing geopolitical tensions offset recent market gains. Trump's tariffs on key countries and rising U.S. crude stocks added pressure to oil prices. Lack of clarity on trade policy and potential oil supply rise from the U.S. could lead to more market volatility.

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India's Crude Oil Imports Rise to Four-Month High, Seeking Alternatives Amid Sanctions

India's crude oil imports in December increased by 1.6% year-on-year to 19.99 million metric tons, with demand rising by 2.1% to 20.67 million tons. On a monthly basis, imports were up 4.8% from November. Indian refiners are seeking alternative fuel supplies due to U.S. sanctions on Russian producers, and the country is expected to boost purchases of U.S. oil and gas.

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Russian Tankers Reroute to Maintain Oil Exports to China Amid US Sanctions

Russian trading tankers are heading east to ensure exports continue to flow to China from the Kozmino terminal amid US ship sanctions. The high demand has led to attractive offers for owners willing to take the risk. Freight rates for moving Espo crude have tripled since the sanctions were imposed, with Aframaxes playing a key role in transporting the oil. This rerouting reflects Russian suppliers prioritizing Asian routes. The US sanctions targeted 161 tankers, with 70% serving Kozmino, putting exports at risk but offering opportunities for other tanker owners. Vessels are seen rerouting to maintain the flow of oil to China. Maini, a vessel operated by Rong Yu Shipping of Hong Kong, has been involved in transporting Russian crude for the past two years. Another vessel that had not previously loaded Russian cargoes is heading to Kozmino in response to the increased demand for oil shipments to China.

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VMC to Sell Vietnam's Largest Shipowner's Product Tanker Dai An Before Special Survey

VMC, Vietnam's largest shipowner, plans to sell its product tanker Dai An before its special survey in March. The company is accepting trading offers for the vessel, which is valued at $19.7m according to VesselsValue. The value of older MR tankers like Dai An surged after Russia's invasion of Ukraine in 2022, peaking at over $24m in July 2024. However, values have started to decline due to decreased acquisitions by shadow fleet operators and pressure from the US, UK, and EU. Dai An has been mainly operating in South East Asian waters, transporting refined petroleum products. After the sale, VMC/Vosco will have only one MR2 remaining. Vosco's fleet expansion plans included acquiring new tankers and bulkers, with the recent purchase of two supramax bulk carriers in December.

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Optimism Prevails in Middle East to Asia VLCC Market Despite Recent Fluctuations

The VLCC rates in the Middle East to Asia route have seen fluctuations recently, with rates hitting a peak before cooling down. Despite the recent drop, brokers remain optimistic about the market. Fearnleys noted a fixture for Vietnam's NSRP which saw competitive offers settling at Worldscale 65 for a modern ship. Deals like the Morning Hope fixture and Kuwait Petroleum Corp chartering the Shaden indicate potential for higher rates in the future. China VLCC Co's New Joviality was also chartered for a voyage from the Middle East to Korea. Frontline CEO Lars Barstad expressed confidence in the market's future during a briefing with ABG Sundal Collier, predicting a bullish market by 2025 with increasing demand in Asia and challenges to oil exports from Iran, Russia, and Venezuela. Time charter deals in the mid to low $50,000 per day range suggest further upside potential in the rates.

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Barbados and Panama De-List Russian Oil Vessels in Response to US and UK Sanctions

In response to US and UK sanctions, Barbados and Panama are de-listing vessels carrying Russian oil. A significant portion of Russia's oil tanker fleet is being forced to change flags, with 46 ships being asked by Barbados and 68 by Panama to remove their flags. Many of these vessels are also sanctioned by the US. As a result, Russian ships are switching flags to countries like Tanzania and São Tomé and Príncipe. This disruption in the shipping network highlights the impact sanctions can have on Russia's oil exports and military operations. While sailing under the prestigious Barbados flag was advantageous for Russian shipping, the country follows UK rules and won't remove vessels sanctioned by the US unless they are also sanctioned by the UK. Some Russian ships have already been re-registered with other nations, reflecting the challenges faced by Moscow in maintaining its logistics network. Panama has also canceled vessels aligning with international sanctions to comply with regulations from the US, EU, UK, and UN.

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