Oil settles down $1 at four-year low as US-China trade war escalates

Oil prices dropped over $1 a barrel due to fears of recession from U.S. and China trade tensions. Goldman Sachs predicts Brent and WTI oil could hit $62 and $58 per barrel by December 2025. Trump announced the U.S. and Iran will hold nuclear talks in Oman. The U.S. plans to impose higher tariffs on China, leading to concerns about global economic contraction. Talks with Iran are set to be indirect, potentially leading to tighter sanctions. On Wednesday, official oil inventory data is expected to be released.

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Keystone oil pipeline shut after spill in North Dakota

The Keystone oil pipeline, a crucial conduit for Canadian crude oil to U.S. refineries, was shut down after a leak near Fort Ransom, North Dakota. South Bow, the pipeline operator, estimates around 3,500 barrels of oil leaked due to the rupture. The shutdown caused Canadian oil prices to fall, widening the discount to U.S. oil. This is not the first incident on the Keystone pipeline, as at least five prior spills have been reported since it started in 2010. The latest major spill in December 2022 leaked around 14,000 barrels in rural Kansas, leading to a shutdown of the pipeline for 21 days. Oil market participants are now facing supply disruptions and uncertainty regarding the timeline for the Keystone pipeline restart.

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Russia's ESPO Blend oil dips below $60/bbl Western price cap for the first time

The price of Russia's ESPO Blend oil dropped below the $60 per barrel Western price cap level for the first time, following a decrease in the international Brent benchmark. Brent futures fell to $64.21 per barrel, the lowest since April 2021. ESPO Blend was priced around $56-57 per barrel on April 7, with potential for it to dip further due to the market conditions. This grade of Russian light crude oil, exported to Asian markets, typically trades at a premium due to its quality. The price cap rule imposed by G7 countries limits Moscow's revenue from energy sales, preventing Western insurance and shipping services for crude oil sold above $60 per barrel. The U.S. OFAC has raised concerns about ESPO crude oil trading above the cap and using covered services provided by U.S. persons. Lower prices for ESPO Blend will benefit oil sellers by making it easier to fix vessels for shipments, but may impact Russian sellers' revenues.

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Sanctioned tanker transfers Russian oil after being barred from India

The Andaman Skies, an aging tanker, resolved a dispute over its class certificate by transferring its cargo of Russian oil to another vessel. The 111,000-dwt tanker offloaded 800,000 barrels of Varandey crude onto the 113,000-dwt Ozanno, both under Western sanctions. The Ozanno is owned by Atos Remote Solutions of India. The Andaman Skies lacked acceptable seaworthiness documentation and was blacklisted by the UK and EU. The vessel is said to be classed by Dakar Class in Kerala. India, the largest buyer of seaborne Russian crude, received the oil delivery. The Andaman Skies is owned by Durbeen Navigation and operated by Northpole Marine of India. It was sanctioned by the UK in December for its involvement in transporting Russian oil. The EU has also blacklisted the vessel, but the US has not sanctioned it yet.

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CPC Terminal Operations and Suezmax Market Impact

CPC temporarily halted two moorings at its Black Sea terminal, disrupting Kazakh CPC blend exports. A Russian court later allowed operations to resume. Suezmax tanker rates dropped but recovered as shipments restarted. Kazakhstan's oil output hit a record, boosting exports. CPC was fined for regulatory issues and must comply by June 30. European refiners may face sourcing challenges if disruptions persist.

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Biggest ever suction sails fitted on juice tanker on charter to Louis Dreyfus

Bound4blue, a wind propulsion company, recently completed the installation of its largest suction sails at the Astander Shipyard in Spain. The four 26-meter-high sails were fitted onto Wisby Tankers’ juice tanker, Atlantic Orchard, resulting in fuel and emission savings projected to reach around 10%. This installation was the third one in 2024 for Bound4blue, showcasing the simplicity and versatility of adopting wind propulsion solutions. The company’s CEO stated that the project demonstrated how their technology met customer needs efficiently. The eSails have a typical payback period of less than five years and have been ordered by companies like Maersk Tankers, Marflet Marine, and Eastern Pacific Shipping. Louis Dreyfus Co, the charterer of the tanker, expressed excitement about moving towards a low-carbon maritime industry and looked forward to sharing insights after completing their first voyage to Brazil.