2024.09.24

China's refiners brace for higher fuel costs amid expected tax revamp

China is set to introduce tax reforms that will raise costs for imported fuel oil, causing independent refiners, known as teapots, to reduce their fuel oil purchases. The reforms, expected in October, will alter the consumption tax rebates given to refiners for converting fuel oil into gasoline and diesel. This change could increase processing costs by nearly 400 yuan ($57) per ton, pressuring smaller refiners to cut or halt production. The expected policy shift has already slowed fuel oil import deals, impacting suppliers from Iran, Russia, and Malaysia, and is contributing to a drop in fuel oil prices. The policy change aims to boost state revenue but threatens to strain China's refining sector, which is already grappling with thin margins due to weaker demand and competition from electric vehicles.

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[SLOW] https://slowspace.io/ Trade Flow India seaborne crude imports from Russia by origin ports

India's Russian oil imports drop 18% in August, refinery slowdowns

India's imports of Russian oil dropped by 18.3% in August to around 1.7 million barrels per day (bpd) due to reduced crude processing by some refiners. This decline lowered Russia's share of India's oil imports to 36%, down from 44% in July. Despite the decrease, Russia remained India's top oil supplier, followed by Iraq and Saudi Arabia. India, the world's third-largest oil importer, saw its overall oil imports drop slightly by 1% in August. While Russian oil purchases fell, OPEC’s share in India’s imports rose, driven by increased Iraqi oil imports, though OPEC's overall share has reached an all-time low in the fiscal year starting in April.

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[SLOW] https://slowspace.io/ _ Distance

US oil companies evacuate gulf staff as potential hurricane threatens production

US oil producers are evacuating staff from Gulf of Mexico oil platforms due to the threat of a potential hurricane. A tropical cyclone near Cuba is expected to develop into a hurricane within 72 hours, potentially becoming a major storm when it reaches the northeastern Gulf Coast. Companies like Chevron, Shell, and Equinor are evacuating non-essential personnel from offshore facilities as a precaution. Although production hasn't been affected yet, the storm is expected to bring life-threatening storm surges and damaging winds. Forecasters predict it could make landfall later this week as a Category 3 or possibly Category 4 hurricane.

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Eswatini warns of unauthorized ships misusing its flag

Eswatini, a landlocked African nation, has reported that hundreds of ships are illegally sailing under its flag without authorization. In a letter to the International Maritime Organization (IMO), Eswatini's government revealed that while some ships were mistakenly registered, around 380 vessels remain unaccounted for. The government requested help in addressing the misuse. The issue follows the UAE's ban on ships carrying Eswatini’s flag, reflecting a global effort to distance from vessels associated with risky or sanctioned activities. Eswatini was recently added to the International Transport Workers’ Federation's "flags of convenience" list.

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[SLOW] https://slowspace.io/ _ GATE, Rotterdam

Netherlands reports rise in Russian LNG imports, calls for stronger sanctions

Russian LNG imports at the Netherlands' GATE terminal in Rotterdam have increased, with the average number of Russian carriers doubling in the third quarter. This rise may be linked to sanctions enacted over the summer, which restrict the throughput of Russian LNG to non-EU countries but allow imports for EU nations. Dutch Energy Minister Sophie Hermans expressed concern over the increase, stressing the need for a unified European response. She plans to advocate for stricter sanctions at the upcoming EU energy ministers' meeting on October 15, aiming for broader discussion among European leaders.

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European gas prices surge on supply risks and forecasted colder weather

European natural gas prices rose by as much as 5.5% on Monday, driven by geopolitical supply risks and forecasts for colder weather. The price hike follows concerns over Israel's escalating conflict with Hezbollah, which may disrupt gas supplies to Egypt and Jordan. In Ukraine, risks to energy infrastructure persist amid ongoing tensions with Russia, potentially affecting Russian gas transits to Europe. Additionally, unplanned outages in Norway's gas facilities and reduced U.S. LNG exports contribute to supply concerns. Colder-than-normal temperatures forecasted for Europe in early October may further increase gas demand for heating.

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[SLOW] Shipping Market - Gas _ TCE comparison by VLGC route

VLGC freight rates decline sharply, with further drops expected

VLGC (Very Large Gas Carrier) spot rates have dropped significantly, with market averages falling from $33,000 per day last week to as low as $18,000 per day. Rates on the Houston-China route hit $28,300 per day, the lowest since February, with further declines anticipated. The Baltic LPG Index has plummeted by over half since the start of the month. Despite favorable US propane export conditions, the influx of new vessels and improved availability from the Panama Canal have increased ship supply, pushing rates down. However, a recovery is expected, with freight rates potentially reaching $46,000 per day by December.