2024.10.14

US expands sanctions on Iran’s energy sector and targets 'ghost fleet' after attack on Israel

In response to Iran’s recent attack on Israel, the US Treasury Department has extended sanctions on Iran, focusing on its petrochemical and refinery sectors. More than seventeen ships were added to the sanctions list, aiming to disrupt Iran's "ghost fleet," which allegedly facilitates the illicit shipping of Iranian oil. These actions come 10 days after Iran's ballistic missile strike on Israel, which was framed as a reaction to military action against Hezbollah in Lebanon.

Treasury Secretary Janet Yellen emphasized that the sanctions are intended to curtail Iran’s destabilizing activities, including its nuclear program, missile proliferation, and support for terrorist proxies. The sanctions, enacted under the Stop Harboring Iranian Petroleum (SHIP) Act, target Iran’s energy industry, which finances these activities.

Sanctioned entities include shipping companies from the UAE and Malaysia, which were accused of using falsified documents to transport Iranian oil, mainly to Asia. The State Department also targeted additional vessels and companies involved in moving Iranian petroleum.

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Over 50 UK firms probed for oil price cap breaches, no fines issued

Since the G7 oil price cap was introduced in December 2022 to limit Russian profits from oil sales, more than 50 UK-linked companies have been investigated for potential breaches of the cap, though no fines have been issued. As of August, 37 investigations remained active, with 15 completed. The cap prevents Western companies from participating in Russian oil shipments sold above $60 per barrel, but some firms continued involvement by using documents showing compliance.

Meanwhile, the International Group of P&I Clubs reported that 800 ships left their coverage due to compliance challenges. The Financial Times also revealed that British financier John Ormerod, backed by Russian funds, facilitated ship purchases that ended up in the shadow fleet, though no legal violations were found.

[SLOW] Oil Market  North Sea Ural

[SLOW] Oil Market  Asia ESPO / Sokol

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[SLOW] Daily VLCC Market _ TCE comparison by routes

VLCC spot indices fall for fourth day despite Onassis group’s rate increase on Middle East-China trade

VLCC spot rate indices have dropped for the fourth consecutive day, with the Baltic Exchange reporting a 6% decline to $37,200 per day on Friday, marking a 12.3% decrease from Monday's $42,400 peak. This is the lowest index reading since October 2, driven by declining rates on key routes like the Middle East-to-China trade.

However, Olympic Shipping & Management, part of the Onassis group, defied the downward trend. Its vessel Olympic Target secured a charter from Unipec at a rate of WS 56, translating to $48,100 per day, benefiting from the ship’s scrubber that allows for cheaper fuel use. This rate contrasts with lower earnings from other vessels on the same route, such as the Sea Ruby, which lacks a scrubber and earned $28,700 per day.

Rates also fell for VLCCs lifting cargo in West Africa and the US Gulf Coast. For instance, the scrubber-fitted Ancona fetched WS 65, significantly lower than previous fixtures in the region.

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[SLOW] https://slowspace.io/ FLOW Westridge Marine Refinery _ Cargo Flow

PetroChina withdraws as committed shipper on Trans Mountain Pipeline, assigns contracts to another party

PetroChina Canada, a subsidiary of China's largest oil producer, PetroChina, has ceased being a committed shipper on the expanded Trans Mountain oil pipeline. In a letter to the Canada Energy Regulator dated October 10, the company stated that it had transferred its shipping contracts to another, unnamed party. This change follows the recent expansion of the pipeline, which now has the capacity to transport 890,000 barrels per day of crude from Alberta’s oil sands to Vancouver’s port. PetroChina Canada also withdrew from its role as an intervenor in a dispute over pipeline tolls but has not provided a reason for its decision.

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[SLOW] https://slowspace.io/ FLOW Dangote Petroleum Refinery _ Cargo Flow

Nigeria ends NNPC monopoly on fuel purchases from Dangote refinery

Nigeria has ended the Nigerian National Petroleum Corporation’s (NNPC) monopoly as the sole buyer of gasoline from Aliko Dangote’s massive refinery. The move is part of Nigeria's broader shift towards full deregulation of its fuel market. Now, independent retailers can purchase gasoline directly from local refineries, marking a significant change from the previous system where NNPC handled all gasoline purchases and distribution.

This shift follows Nigeria's decision to raise fuel prices closer to market rates in September, coinciding with the Dangote refinery's start of local gasoline production. Finance Minister Wale Edun emphasized that this transition aims to promote competition, streamline the supply chain, and enhance fuel availability, benefiting consumers and stabilizing market conditions. Retailers will now be able to negotiate directly with refineries, moving towards a more efficient and deregulated petroleum market.

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[SLOW] https://slowspace.io/ _ Tamil Nadu, India

Chennai Petroleum seeks $3.3 billion loan for major refinery project in southern India

Chennai Petroleum Corporation Ltd. is in discussions with banks to secure a loan of 280 billion rupees ($3.3 billion) to finance the construction of a 9-million-ton-a-year oil refinery in Tamil Nadu, India. The State Bank of India (SBI) is leading the transaction, which would be one of the largest local-currency loans in India this year. The refinery, with a total project cost of 330 billion rupees, is expected to take 36 months to complete once approved by the federal government.

Chennai Petroleum is majority-owned by Indian Oil Corporation, which is rapidly expanding its refining capacity to meet growing domestic demand for fuels like diesel and gasoline. While National Iranian Oil Co. holds a 15.4% stake in Chennai Petroleum, it is not directly involved in the new refinery project. Indian Oil will own 75% of the plant, named the Cauvery Basin Refinery, with Chennai Petroleum holding the remainder. SBI Capital Markets will act as the loan syndication adviser.

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[SLOW] https://slowspace.io/ _ Omsk Oil Refinery

Russia's largest refinery increases crude processing by 4% in first nine months of 2024, Gazprom reports

The Omsk oil refinery, Russia's largest by production volume and operated by Gazprom Neft, increased crude oil processing by 4% year-on-year in the first nine months of 2024, following a modernization of its facilities. Gazprom announced that the refinery also boosted domestic gasoline supply by 5% and diesel by 10% during the same period, although specific volume figures were not disclosed. Located 2,700 km east of Moscow, the Omsk refinery processed 21.28 million tons of crude oil (approximately 425,600 barrels per day) in 2023, representing nearly 8% of Russia's total oil refining capacity.

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[SLOW] Tanker Fleet Study _ Fuel type of VLCC by built year

China seeks carbon emissions data from foreign ships

China has begun requesting carbon emissions data from some overseas shipowners operating at local ports, signaling increased scrutiny of the shipping industry as it explores expanding its emissions-trading system (ETS) to include shipping. This move follows the European Union's introduction of a carbon levy on vessels and aligns with China's broader environmental goals, as it aims to reach net-zero emissions by 2060.

China's Ministry of Transport said the requests were made in response to the International Maritime Organization’s (IMO) data-collection requirements. The nation’s ports, which are among the busiest globally, could play a key role in global carbon regulation, especially as the shipping industry remains a significant contributor to energy-related emissions.

China is already a leader in shipbuilding, capturing 70% of global orders for vessels that run on cleaner fuels like LNG and methanol. Expanding its ETS to cover shipping could bring the country in line with the EU's regulations, putting pressure on the IMO to establish a global emissions standard for the maritime sector.