Oil Prices Climb for Second Week Amid U.S. Sanctions and OPEC+ Output Cuts

Oil prices rose for the second consecutive week, driven by tightening supply expectations following new U.S. sanctions on Iran and an updated production plan from OPEC+. Brent crude futures increased by 0.2% to $72.16 per barrel, while WTI crude futures climbed 0.3% to $68.28. Over the week, Brent gained 2.1% and WTI rose 1.6%, marking their largest gains since early January. The U.S. Treasury imposed fresh sanctions on Iranian crude shipments, including an independent Chinese refiner, signaling a stricter enforcement policy. Analysts estimate these sanctions could reduce Iranian oil exports by 1 million bpd, down from 1.8 million bpd in February. Additionally, OPEC+ announced new production cuts for seven members, with reductions ranging from 189,000 bpd to 435,000 bpd until June 2026, aiming to offset prior overproduction. While the plan could limit OPEC+ output growth, compliance from Iraq, Kazakhstan, and Russia remains uncertain. Notably, Kazakhstan’s oil output hit a record high in March, surpassing OPEC+ quotas, adding complexity to supply dynamics.

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Kazakhstan’s Oil Output Hits Record High, Challenging OPEC+ Quotas

Kazakhstan's oil production surged to a record high in March, reaching 2.16 million bpd due to oilfield expansion, surpassing its OPEC+ quota by nearly 400,000 bpd. The country has struggled to adhere to production limits in recent months, despite pressure from OPEC+ leaders Saudi Arabia and Russia. One major obstacle is convincing U.S. oil majors like Chevron and Exxon Mobil, which have invested billions in Kazakhstan’s largest fields, to scale back output. The non-compliance issue has led to the resignation of Kazakhstan's Energy Minister. In response to overproduction, OPEC+ has introduced a new schedule requiring Kazakhstan and six other nations to implement additional cuts. However, Kazakhstan’s oil exports via the Caspian Pipeline Consortium remain high, with April export levels set at 1.7 million bpd, matching March levels. The country's output has contributed to tensions within OPEC+, influencing the group’s decision to proceed with a gradual production increase starting in April.

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Suezmax Rates Surge to 12-Month High as Black Sea Shipments Increase

Suezmax earnings in the Mediterranean have surged to their highest level in over a year, reaching $63,000 per day, up from $18,000 at the start of 2025. The Baltic Exchange assessed spot suezmax rates at $52,000 per day, a 21% increase in just one week. This surge follows an increase in Kazakh oil loading from the Black Sea, particularly from Kazakhstan’s Tengiz oilfield, which feeds the CPC pipeline system. As of the second quarter, output from the field is expected to rise by 260,000 barrels per day, bringing total output close to 960,000 bpd. This will equate to a suezmax cargo every day, with the April CPC programme set to include 38 suezmax cargoes, up from 22 per month in 2024. In comparison, Aframax cargo loadings fell from 33 in January to 25 in February, with March still heavily weighted toward suezmaxes. Despite Ukrainian drone attacks on the Kropotkin pumping station along the CPC pipeline, tanker loadings have not been significantly affected. Additionally, while Kazakhstan's planned production cuts under OPEC+ quotas were expected to impact volumes, no substantial effect has been seen yet. The increase in tonne-mile demand, with 9 million barrels of CPC blend heading to Asia in March and another 3 million barrels booked for April, has further tightened tonnage availability, particularly in the Mediterranean and Black Sea regions. Despite strong Black Sea demand, other key suezmax routes such as West Africa to UK Continent and US Gulf to UK Continent have not yet seen a major impact, although West African markets are showing steady gains.

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U.S. Sanctions to Slow but Not Halt China’s Iranian Oil Imports

New U.S. sanctions on Chinese refiners and tankers are expected to temporarily reduce Iran’s oil shipments to China, raising freight costs. However, traders predict buyers will find alternative methods to continue importing at least some volumes. Washington’s latest sanctions targeted Shouguang Luqing Petrochemical, an independent refinery in Shandong, and vessels supplying Iranian crude. This marks the fourth round of sanctions under President Donald Trump’s "maximum pressure" policy aimed at curbing Iran’s oil exports. Freight costs for a VLCC from Malaysia to China have surged to $3-$4 per barrel—more than double the late 2024 rate. Despite earlier declines, China’s Iranian oil imports rebounded to 1.43 million bpd in February from 898,000 bpd in January, with projections nearing 1.7 million bpd before the new sanctions. Analysts expect a sharp drop in imports for the remainder of March. Over 10% of China’s crude imports come from Iran, often rebranded as Malaysian oil. China opposes what it calls "indiscriminate and illegal" U.S. sanctions, vowing to protect its enterprises. Meanwhile, Luqing, which runs a 160,000 bpd refinery, remains a major Iranian crude buyer. Despite the sanctions, some traders report that Chinese buyers remain unfazed, continuing to request Iranian oil price quotes.

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Sinopec’s 2024 Net Profit Drops 16.8% Amid Falling Oil Prices, NEV Growth

Sinopec, the world’s largest oil refiner, reported a 16.8% decline in 2024 net profit, totaling 50.3 billion yuan ($6.94 billion), due to falling crude oil prices and the rapid expansion of the new energy vehicle (NEV) market. The company’s gasoline and diesel sales dropped by 0.7% and 4.8%, respectively, while aviation fuel sales rose by 7.3%. Refinery throughput declined 2.14% to 252 million metric tons (5.06 million barrels per day), though Sinopec forecasts an increase to 255 million tons in 2025. The company expects to produce 280.15 million barrels of crude oil and 1,450.3 billion cubic feet of natural gas next year. In response to market volatility, Sinopec allocated 7.2 billion yuan ($993.3 million) for asset impairment due to price fluctuations and facility shutdowns. Despite the profit decline, sales in its petrochemical segment, including chemical fibers and plastics, rose by 19.8%. Sinopec plans to invest 164.3 billion yuan in 2025, focusing on exploration and development to navigate ongoing industry shifts.

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Hackers Disrupt Communications on 116 Iranian Ships in Alleged Cyber Attack

Hackers from the group Lab Dookhtegan claim to have launched a cyber attack disrupting communications on 116 Iranian cargo ships, including vessels operated by the National Iranian Tanker Company (NITC) and the Islamic Republic of Iran Shipping Lines (IRISL). The group announced on Telegram that the operation coincided with US strikes against Houthi rebels in Yemen and targeted two Iranian shipping companies sanctioned by the US, UK, and EU. The attack reportedly severed communication links between affected ships, ports, and external networks, potentially delaying operations for weeks. Maritime cybersecurity researchers from Cydome suggest that if the attack is confirmed, it demonstrates a high level of automation and coordination, raising concerns about the vulnerability of global shipping to cyber threats. Iranian authorities and the affected companies have not yet commented on the claims.

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Kurdistan’s Crude Output Reaches 286,000 bpd Amid Export Standoff

Iraq’s Kurdistan region is producing 286,000 barrels of crude oil per day, according to Iraqi oil minister Hayan Abdel-Ghani, citing secondary sources used by OPEC+ to track production. However, crude exports to Turkey remain halted for a second consecutive year due to unresolved disputes between oil companies in Kurdistan and Iraq’s oil ministry. The suspension has blocked the flow of Kurdish oil to Turkey’s Ceyhan port, a key export route. While discussions with Kurdish regional authorities continue, no timeline has been given for resuming exports.

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Dangote Refinery Receives First-Ever Brazilian Crude Shipment via International Seaways Tanker

The Seaways Montauk, a 158,000-dwt suezmax tanker operated by International Seaways, is transporting the first-ever Brazilian crude cargo to Nigeria’s Dangote refinery. The vessel loaded 1 million barrels of Buzios crude via a ship-to-ship transfer at Brazil’s Acu Port, receiving oil from the shuttle tanker NS Pioneer, which is operated by China National Offshore Oil Corporation (CNOOC). Shell is reported to have booked the shipment. The Seaways Montauk’s AIS signal has been inactive for seven days, with its last known position showing an eastward course from Brazil. This development follows another first for Dangote, with Greek-owned Spyros carrying the refinery’s first Algerian crude cargo (Saharan Blend), which is expected to arrive on March 22. These shipments mark a diversification of crude supply sources for the Dangote refinery as it ramps up production. Meanwhile, discussions are ongoing regarding the renewal of Nigerian National Petroleum Company’s six-month crude supply deal with Dangote, which expires at the end of March.

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Germany Confiscates Sanctioned Russian Oil-Laden Tanker in Baltic Sea

Germany has confiscated the Panama-flagged suezmax tanker Eventin after it was found drifting in the Baltic Sea with Russian oil on board. The 152,000-dwt tanker, which was built in 2006, had lost propulsion in January, prompting a rescue operation involving tugs and aircraft. Following the operation, the vessel was placed under EU sanctions in February for "irregular and high-risk shipping practices." The Eventin, valued at approximately $30 million, was found to be carrying crude oil from Russia's Ust-Luga port to the Indian subcontinent. The confiscation marks a rare action against a shadow fleet tanker, which typically avoids EU ports while trading oil between Russia and countries like India, China, and Turkey. The seizure is seen as a message to Russia regarding its use of Baltic Sea routes for transporting oil.

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DHT Secures $52,500/Day VLCC Charter Amid Rising Freight Rates

DHT Holdings has locked in a strong one-year charter for its 2017-built, 300,000-dwt VLCC DHT Tiger at $52,500 per day, securing $19.2 million in revenue. The vessel is expected to begin its contract at the end of March, though the charterer remains undisclosed. Analysts at Fearnley Securities view this move as a prudent strategy to mitigate market volatility, though it slightly underperforms their bullish estimates for 2025. The deal comes as VLCC rates surge, with Middle East Gulf-to-Asia freight rates hitting $51,500 per day—up 31% in a week—due to increased cargo activity depleting available tonnage. On Wednesday alone, VLCC earnings for ships loading in the Middle East and West Africa jumped by $8,000.

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Eastern Pacific Shipping Leads Singapore’s Shipowner Rankings with $21B Fleet

Eastern Pacific Shipping (EPS) has emerged as the top Singapore-based shipowner, boasting a fleet valued at $21.08 billion, according to exclusive research by TradeWinds and data from VesselsValue as of early March. EPS operates 205 vessels, far surpassing its closest competitor, Ocean Network Express (ONE), whose 44-ship fleet is valued at $7.2 billion. Other major players include AET (59 vessels, $5.2 billion), Pacific International Lines (87 vessels, $4.24 billion), and X-Press Feeders (66 vessels, $3.05 billion). In terms of vessel operation, ONE leads with 236 vessels, followed by EPS (197), PIL (102), and Berge Bulk (78). Singapore’s shipping registry is most supported by liner companies, with AP Moller-Maersk leading at 119 vessels, followed by Wan Hai Lines (111), PIL (73), Evergreen Marine Corp (58), and Grace Ocean Investment (54). The rankings highlight Singapore’s strong position in global shipping, with a mix of container ships, tankers, bulk carriers, and specialized vessels contributing to its dominance.

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Houthi Attack Pause Allows Increased Fuel Imports to Europe via Suez Canal

A pause in Houthi attacks on commercial shipping has allowed fuel traders to increase cargo imports into Europe via Egypt's Suez Canal. Following a ceasefire, fuel shipments such as diesel and jet fuel have been reaching Europe more frequently through this route. Data from Kpler shows that nearly half of the shipments arriving in Europe in March used the Suez Canal, compared to less than a fifth earlier in the year. The Houthis had announced a halt in attacks in January, following a ceasefire agreement, and this calm period prompted some shipping companies to resume using the Red Sea route. However, tensions have flared recently due to renewed threats from the rebels after Israel suspended aid deliveries to Gaza, although no new attacks have occurred, possibly due to fewer US- or Israel-linked vessels in the area. The situation remains uncertain, as tensions between the US and the militants could impact the continued use of the Suez route.

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Thailand Drafts Law to Accelerate $29 Billion Transport Link

Thailand has introduced draft legislation to establish a special economic zone in the southern provinces, aiming to fast-track a multibillion-dollar transport project that would link the Indian and Pacific Oceans. The proposed Landbridge project, costing approximately 1 trillion baht ($29 billion), aims to create a 100-kilometer (62-mile) highway and rail connection between two seaports in the south of the country, bypassing the busy Malacca Strait. The project is designed to reduce shipping times between the two oceans. A newly formed commission, chaired by the prime minister, will oversee logistics, infrastructure, and funding for the initiative, with the goal of completing the project by 2030. The deep-sea ports in Ranong (Andaman Sea) and Chumphon (Gulf of Thailand) are expected to cost around 630 billion baht. The draft bill is undergoing public hearings before moving to the Cabinet and Parliament.

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US Proposal on Chinese Ships Could Disrupt Global Trade and Economic Stability

A proposal from the U.S. Trade Representative to impose million-dollar levies on Chinese ships docking in U.S. ports is threatening to disrupt global trade. This move, aimed at curbing China's dominance in the maritime industry, could significantly increase the cost of shipping goods, as seen in the case of a shipment of steel pipes from Germany to the U.S. The proposal would impose fees of $1 million to $3 million per port call for vessels built in China, potentially doubling or tripling current shipping costs. China now produces over half of the world’s cargo ships, a stark rise from 5% in 1999. The U.S. aims to revive its own merchant shipbuilding industry, which currently contributes less than 0.01% of global ship production. This proposal, however, could generate up to $52 billion in revenue for the U.S. but would likely increase costs for consumers, disrupt supply chains, and affect global shipping rates. Affected industries, including agriculture and logistics, warn that this policy could cripple U.S. ports and harm businesses, particularly those reliant on smaller ports. With more than 80% of container ships visiting U.S. ports being built in China, the new fees could increase the cost of goods, create economic harm, and shift trade away from U.S. ports to neighboring countries like Canada and Mexico. Although the proposal is expected to face scrutiny and could be altered, its potential effects on global trade remain a major concern.