2024.07.29

UK-Blacklisted Tanker Fighter Two Evades Sanctions to Load Crude Cargo

A UK-blacklisted tanker, the Fighter Two, has managed to load a crude cargo despite sanctions. The 146,400-dwt tanker, sanctioned on July 18 for Russia-related oil trading, loaded 972,000 barrels of oil on July 24 from the Caspian Pipeline Consortium Terminal near Novorossiysk. This is the first instance of a UK-sanctioned tanker loading a cargo. The Fighter Two is flagged by the Cook Islands, owned by a single-ship entity, and managed by Dubai-based Almuhit Alhadi Marine Services. The vessel had been previously managed by Radiating World Shipping Services, also based in Dubai and blacklisted by the UK in December.

Since a change in the law this year, the UK has sanctioned 15 tankers, aiming to restrict their access to UK ports, insurance, and financial markets. However, the sanctions have had a limited impact compared to US measures, which have caused significant disruptions due to the dominance of US dollar transactions. Some vessels have resumed operations by reflagging, finding new insurers, and operating outside G7 enforcement measures. The Fighter Two's activity underscores the more limited effect of UK sanctions. The UK Foreign Office and Almuhit Alhadi Marine Services have been approached for comment.

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Top Ships Secures $100M Long-Term Charter Deals for Tankers

Top Ships, led by Evangelos Pistiolis, has secured long-term charters for two of its product tankers, the Eco Yosemite Park and Eco Joshua Park, in a deal valued at approximately $100 million. These 50,000-dwt vessels will be chartered to Swiss trader Gunvor under five-year agreements, extending their contracts at increased rates. From August 1, the tankers will earn $19,500 per day, up 12% from their previous rate. Gunvor also holds a 50% stake in the subsidiaries owning these tankers. The charters include options for an additional two years.

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China's Iranian Crude Imports Shift to Dalian Amid Changing Market Dynamics

China has been importing Iranian crude oil through the port city of Dalian since late last year, sustaining near-record levels of purchases despite U.S. sanctions on Iran. This shift occurred as demand for Iranian crude in Shandong province decreased due to higher crude prices and weaker-than-expected fuel demand. Independent refiners in Shandong had been the main buyers of Iranian oil in China since 2019.

Tanker tracking firms Vortexa and Kpler reported significant imports of Iranian oil into Dalian, with estimates ranging from 34 to 45 million barrels between October 2023 and June 2024. This represents 13% of China's total Iranian oil imports during the first half of 2024, with imports peaking at 1.52 million barrels per day in October 2023.

Chinese customs have not officially reported any Iranian oil imports since June 2022, and China maintains that its trade with Iran is legal. However, traders often rebrand Iranian oil as originating from countries like Malaysia, Oman, or the UAE to avoid sanctions.

Dalian's imports are likely destined for Hengli Petrochemical's refinery complex, PetroChina's refineries, or a storage base operated by the Liaoning Port Authority. Despite denials from Hengli and a lack of comment from PetroChina, industry sources and tanker tracking data suggest Hengli has purchased significant amounts of Iranian oil.

Iranian oil remains attractive to Chinese refiners due to steep discounts compared to other Middle Eastern and Russian grades.

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Mexico Increases Fuel Imports for 2025 Amid Olmeca Refinery Delays

Mexico is planning to import more motor fuel in 2025 than initially expected due to delays in the startup of the new Olmeca refinery. This shift by state energy company Pemex indicates that the refinery will not be operational soon, impacting the legacy of outgoing President Andres Manuel Lopez Obrador, who commissioned it to reduce reliance on expensive imports. Pemex, heavily indebted and reliant on gasoline and diesel imports due to its outdated refineries, had initially planned to cut imports with the new refinery’s anticipated capacity.

However, reports indicate the refinery won’t produce commercially viable fuels from crude before the year-end, with the International Energy Agency doubting it will be operational before the fourth quarter of next year. Pemex is now seeking fuel import deals in the U.S. and Asia to ensure supplies through this year and next, despite earlier statements from Pemex CEO Octavio Romero about drastically lowering imports.

In the first five months of this year, Pemex’s refineries produced 306,547 barrels per day (bpd) of gasoline and 181,565 bpd of diesel, while importing 358,545 bpd of gasoline and 128,215 bpd of diesel. The delay in the Olmeca refinery’s startup, whose cost has surged to around $17 billion, risks causing fuel shortages and embarrassing the incoming administration. Pemex has already purchased spot cargoes from Asia due to favorable arbitrage economics, but sustained imports from Asia pose logistical and economic challenges.

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Nigeria's Dangote Refinery Reselling Crude Amid Operational Rumors

Nigeria's Dangote Oil Refinery, which started operations earlier this year, is reportedly reselling cargoes of U.S. and Nigerian crude oil, according to four trade sources. Despite market rumors of operational issues with the crude distillation unit (CDU), a Dangote executive confirmed that the CDU is operational but did not comment on the crude reselling offers. The refinery, located near Lagos, has a capacity of 650,000 barrels per day.

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Canada Expected to Postpone Trans Mountain Pipeline Sale Until Post-2025 Election

Canada is likely to delay the sale of the Trans Mountain oil pipeline until after the 2025 national election. The government bought the C$34 billion ($24.88 billion) project in 2018 to ensure its construction, with plans to sell it once operational. The project, which began operations on May 1, aims to nearly triple Alberta oil shipments to Canada’s Pacific Coast to 890,000 barrels per day. While the government has expressed its intention to divest the pipeline, there is no specific timeline for the sale. The project has faced criticism for its costs ballooning to nearly five times the 2017 budget estimate. There has also been no consensus on the pipeline’s valuation. The government is amending regulations to facilitate its sale to indigenous groups.