2024.08.01

Canadian Oil Exports Shift from Asia to US

Canadian crude oil exports via the newly expanded Trans Mountain pipeline are increasingly directed towards the US, particularly California, at the expense of Asian markets. In July, exports to the Far East decreased by 45% to 107,000 barrels per day, while shipments to the US West Coast tripled to 240,000 barrels per day. Exports to China, the largest Asian buyer, dropped by 36% to 91,400 barrels per day. This shift follows the initial trend in June, where Pacific exports were more than double those to the US. Factors contributing to this change include economic challenges and the rise of electric vehicles in China, as well as competition from Russian crude in Asian markets. Despite the current trend, some of the oil shipped to California might still end up in Asia after being transferred to larger vessels.

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VLCC Spot Rates Decline as Chevron Charter Pressures Market

VLCC spot rates have reversed the gains made in mid-July, with both Middle East and Atlantic markets experiencing declines. Average time-charter equivalent rates fell to just under $29,100 per day, a 19.9% drop from last week's peak of $36,300 per day. Despite the decline, current rates are still higher than last year's average of $14,600 per day at this time. Contributing to the downward trend was a charter by Chevron for a West Africa to China voyage, fetching nearly $50,200 per day but estimated at $34,200 per day for a typical 82-day round trip. The Middle East-to-China route saw no new fixtures on Wednesday, with ample ship supply keeping market sentiment soft. Seasonal factors and refinery maintenance typically depress rates in July, but forward freight agreements suggest better rates in the winter, though recent futures have dipped.

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John Fredriksen Expands VLCC Fleet Amid Anticipated Tanker Market Recovery

John Fredriksen's Seatankers Management has added two more Very Large Crude Carriers (VLCCs) to its order at Dalian Shipbuilding Industry Co (DSIC), bringing the total to eight 307,000-dwt vessels. The Norwegian shipowner's latest expansion reflects his optimism about a "multi-year recovery cycle in tankers" starting in 2024. The scrubber-fitted ships, costing around $120 million each, will be delivered between the second half of 2026 and the first quarter of 2028. They will comply with IMO NOx-Tier III regulations and Energy Efficiency Design Index Phase 3 requirements. Fredriksen's confidence is supported by a historically low tanker orderbook, with the VLCC newbuilding orderbook standing at 65 vessels, or 7% of the existing fleet, 47 of which were ordered this year by various shipping companies such as Dynacom Tankers, Ray Car Carriers, DHT Holdings, Magni Partners, Mercuria, Asyad Shipping and Capital Maritime & Trading.

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CMB.Tech to Triple Fleet with $500M Order for 20 Chemical Tankers Following ExxonMobil Deal

CMB.Tech, controlled by the Saverys family, is set to sign contracts for 20 new stainless steel tankers worth over $500 million, tripling its small tanker fleet to 30 vessels. The order includes 10 tankers of 5,300 dwt and 10 of 15,000 dwt from Nantong Xiangyu Shipbuilding & Offshore Engineering in China, priced at around $40 million each for the larger tankers and at least $15 million each for the smaller ones. These vessels are designed for conventional marine fuel but are ammonia-ready and will be contracted against charter deals with ExxonMobil. The smaller tankers will be used between the UK and the ARA, Amsterdam-Rotterdam-Antwerp region. The contracts were secured before new cyber-security regulations raised newbuilding prices. CMB.Tech and ExxonMobil have yet to comment on the details of the charters. CMB.Tech’s current fleet includes 10 vessels, with additional tankers under construction in China.

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Russia Imposes Temporary Ban on Gasoline Exports for September-October 2024

The Russian government has announced a ban on gasoline exports for September and October 2024, as reported by state-run news agency TASS. Russian Deputy Energy Minister Pavel Sorokin noted that gasoline stocks are 1% higher than the previous year, while exports in July 2024 decreased by 33%. Oil refining in Russia has increased by 4% compared to last year. Sorokin mentioned that there is no need for a diesel export ban, with production projected to rise to 15-20 million metric tonnes by 2028-2030.

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India's Diesel and Jet Fuel Exports to Singapore and Australia Surge to 2.5-Year High in July

In July, India's diesel and jet fuel exports to Singapore and Australia are set to reach their highest levels in 2.5 years, driven by tepid demand from Europe. Exports are estimated to be between 157,000 bpd and 224,000 bpd, marking a 30% increase from June. Australia’s imports are expected to hit a two-year high of 450,000 metric tons, influenced by refinery maintenance and a government mandate to increase stockpiles. The shift to Asia aims to prevent price drops and inventory build-ups in Europe, where domestic supplies are robust. However, the sustainability of these exports is uncertain due to improving Europe-bound shipping economics and upcoming maintenance at Indian refineries.