2024.10.18

UK imposes largest sanctions yet on Russian shadow fleet

The UK has issued its biggest sanctions package against Russia, targeting 18 tankers and four LNG carriers linked to Russia's shadow fleet, bringing the total to 43 vessels sanctioned this year. The move is part of a broader effort to curb Kremlin energy revenues and includes ships linked to Sovcomflot and managed by Dubai-based companies. The UK aims to disrupt Russian oil exports by leveraging London’s marine insurance and finance markets, though reports show many blacklisted vessels continue operating under flags of convenience.

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Russian Urals oil prices slip below $60 cap amid global oil price drop

The price of Russia’s Urals crude fell below the Western-imposed price cap of $60 per barrel on Tuesday and Wednesday, as global oil prices weakened. This marks one of the few instances in 2024 when Urals prices dipped under the cap, following similar drops in June and September. Recent estimations show Urals loading from Baltic ports at $59.95 per barrel and from the Black Sea at $59.35 per barrel. The decline comes as Brent crude prices dropped by 7% over three days due to lowered demand forecasts and less concern over Middle East supply disruptions. The price cap, introduced by G7 countries and Australia, aims to limit Russia's oil revenue while allowing trade below $60 per barrel using Western services.

[SLOW] Oil Market North Sea Oil Price Urals

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Increase in Kazakh oil production boosts tanker traffic at Russia’s Black Sea port

Tanker shipments from Russia's Black Sea port of Novorossiysk are set to rise as Kazakhstan boosts oil production. Kazakhstan’s crude exports, loaded via the Caspian Pipeline Consortium (CPC) terminal, are expected to increase by 243,000 barrels per day to 1.92m bpd in November, following maintenance at the 400,000 bpd Kashagan oil field. This increase could lead to more frequent tanker loadings, with over one aframax-sized cargo every three days. The CPC terminal is also undergoing upgrades to reduce bottlenecks, aiming to accommodate three tankers simultaneously by July 2025.

[SLOW] https://slowspace.io/ Novorossiysk, Black Sea CPC Marine Terminal _ Cargo Flow

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US sanctions target Houthi financier’s shipping network in latest crackdown

The US Treasury has imposed sanctions on additional ships, companies, and individuals linked to Sa’id al-Jamal, a key financier for Yemen’s Houthi rebels. Al-Jamal, allegedly supported by Iran’s Qods Force, uses an international network to transport and sell Iranian oil, funding Houthi operations. The sanctions target eight vessels, including chemical and product tankers, as well as key figures like Ukrainian national Yevhen Skriabin and UAE-based companies linked to the illicit oil trade. The move is part of ongoing US efforts to disrupt revenue sources fueling Houthi attacks and regional destabilization.

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[SLOW] https://slowspace.io/ Trade Flow Saudi Arabia seaborne crude exports by destination countries

Saudi Arabia's crude exports fall to one-year low in August despite rising production

Saudi Arabia’s crude oil exports dropped to a one-year low of 5.671 million barrels per day (bpd) in August 2024, according to the Joint Organizations Data Initiative (JODI). This marked a 1.2% decline from July’s 5.741 million bpd. Despite the fall in exports, Saudi Arabia increased crude production to 8.992 million bpd, while refinery throughput and direct crude burning also rose. OPEC and its allies' supply cuts remain in effect until December, even as global oil demand forecasts for 2024 have been lowered, driven primarily by slower demand growth in China.

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Frontline sees rate surge on Brazil-to-China route as VLCC market rebounds

Frontline has secured a lucrative fixture, lifting Brazil-to-China rates for VLCCs amid a broader market recovery. Average VLCC spot earnings rose to $38,600 per day, marking a 6.9% gain after a brief slump. Frontline’s 300,000-dwt Front Neiden was chartered by Equinor at a higher WorldScale rate of WS 60, compared to previous fixtures. This deal is valued at $40,400 per day, or $46,200 when adjusted for a round-voyage comparison. Analysts note the VLCC market is emerging from a shoulder period, with rising rates and increased activity as Chinese crude imports rebound.

[SLOW] VLCC Market Monitor _ TCE comparison by routes

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[SLOW] Tanker Fleet Study _ Top 30 ship owners by total deadweight tons

Cosco Energy expands fleet with $177m acquisition of LPG and chemical carriers

Cosco Shipping Energy Transportation (CSET) is acquiring 16 LPG and chemical carriers from sister companies for $177 million to enhance its energy shipping operations and target global markets. The purchase includes 14 LPG ships and 10 chemical vessels, forming part of CSET's strategy to integrate its supply chain and align with China's state-owned enterprise reforms. This move builds on CSET's current fleet of 132 tankers with 42 VLCCs and gas carriers and follows a recent $509 million investment in LNG carriers, further diversifying its portfolio.

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[SLOW] Oil Market HSFO Singapore, Fujairah, Rotterdam, and Houston

Surging Egyptian demand and tight supply propel European fuel oil prices

Increased fuel oil imports by Egypt for power generation, combined with reduced supply in Europe, have driven European high-sulphur fuel oil (HSFO) prices to their highest level in over a year. Egypt's fuel oil imports peaked at 255,000 barrels per day in September, the highest since 2016, as the country struggles with power shortages. This surge, coupled with refinery outages in Europe, has tightened supply and boosted HSFO profit margins. The rising demand for marine fuel and supply constraints from heavier crude grades have further buoyed prices, benefiting refiners but increasing costs for other industries.

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[SLOW] LR2 Market Monitor _ LR2 TCE comparison by routes

Jet fuel surge boosts LR2 tanker demand as global aviation recovers

Rising jet fuel exports are driving increased demand for LR2 tankers, with shipments up 11% in the first nine months of 2024 compared to 2023. As global airline passenger traffic recovers to pre-pandemic levels, jet fuel shipments have grown by 56% since 2021, now accounting for 8.5% of clean petroleum product volumes. 

Tanker liftings reached a total of 461 million barrels, averaging 1.7 million barrels per day. From 2021 to 2024, shipments from the Middle East Gulf and the Red Sea accounted for 41% of the growth in volumes, while contributions from China, South Asia, and North America were 24%, 15%, and 13%, respectively, according to Bimco.

In terms of destinations, northern Europe has been the largest recipient, representing 36% of the total volumes, followed by the Mediterranean, which accounted for 15% of the increase.

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[SLOW] Tanker Fleet Study _ Scheduled tanker deliveries by ship type

Tanker newbuilding orders surge amidst trade disruptions, fleet renewal, and aging vessels

Tanker newbuilding orders surged to an 18-year high in Q3 2024, with 187 vessels totaling 15.8 million dwt contracted, the highest quarterly figure since 2006. The clean tanker sector led the boom, accounting for 151 vessels, including 47 medium-range (MR) tankers. The crude sector saw 43 VLCC and 48 suezmaxes contracted in 2024. China dominated shipbuilding, handling 68% of orders, as South Korean yards shifted focus to gas carriers and containers.

This uptick follows disruptions in trade flows, particularly from the Russia-Ukraine conflict and Houthi attacks, which boosted demand for tanker tonne-miles. After a drought in VLCC orders—only two in 2022 and 16 in 2023—2024 saw a surge with 43 VLCCs contracted. The average VLCC fleet age reached nearly 12 years, the highest in 25 years, with 133 vessels over 20 years old. Fleet modernization is accelerating as older tankers face reduced trading options.

Orders also increased for MRs, LR2s, and handysize tankers, with notable contracts from companies like Seacon Shipping, John T Essberger, and China Merchants Group.

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