Oil Prices Drop 2% as Trump Initiates Ukraine Peace Talks

Oil prices fell over 2% on Wednesday after Donald Trump engaged in peace talks with Vladimir Putin and Volodymyr Zelenskiy, easing geopolitical risks. Brent settled at $75.18 per barrel, down 2.36%, while WTI dropped 2.66% to $71.37. The decline followed three days of gains exceeding 3.5%. Analysts noted that talks reduced the risk premium on oil. Meanwhile, higher-than-expected U.S. inflation in January dimmed hopes for Fed rate cuts, which could slow economic activity and oil demand. U.S. crude stocks rose unexpectedly, while Russian oil output faces pressure from sanctions and drone attacks. OPEC kept its oil demand growth forecast steady, and the EIA raised its 2025 U.S. production estimate to 13.59 million bpd.

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VLCC Market Faces Price Gap as Buyers and Sellers Struggle to Agree on Deals

The latest reported sale of the FPMC C Intelligence, a 302,000-dwt VLCC built in 2010, highlights the ongoing price gap between buyers and sellers in the tanker market. While brokers indicated that the vessel was sold to unknown Chinese interests for a price in the high $40 million range, a tanker source claimed the deal fell through as the seller countered with a price in the high $50 million range. As a result, the ship was taken off the market, though one buyer is reportedly making another attempt with an offer around $50 million. The vessel, owned by Formosa Plastics Marine Corp of Taiwan, remains in operation. Greece’s Allied Shipbroking noted that new U.S. sanctions on Iran and tighter restrictions on Russian oil flows in Europe have added uncertainty to the tanker market, despite an increase in VLCC acquisitions at softer prices. Last week, Vietnam’s Viet My Petrol Transportation exited the VLCC sector, selling its Gold Pearl, a 318,700-dwt vessel built in 2005, for $29.5 million—significantly below its $36 million valuation. Similarly, in January, the company sold its other VLCC, Rolin, for $30.5 million to an undisclosed buyer. These transactions reflect how vintage VLCC prices have declined due to market saturation and sanctions affecting older ships.

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Sanctioned VLCC with Controversial History Sold to Unknown Buyers

The Loggam, a 300,000-dwt Palau-flagged VLCC built in 2003, has been sold again to unidentified buyers for $30.5 million, slightly above its estimated value of $29 million. Previously owned by Quartz Ventures, a Liberian-registered company under Greek control, the vessel has changed hands multiple times and frequently altered its name and flag. The ship, formerly known as Floki, Voyager I, Rojos, Valhalla, Phoenix X, and Vlad, has been linked to controversial incidents, including U.S. sanctions in 2020 for allegedly transporting Venezuelan oil, though it was removed from the list a month later. It was also suspected of involvement in a 2019 oil spill off Brazil, but its owners provided evidence placing it in India at the time. The sale reflects a broader trend in the tanker market, with increasing demand for VLCCs and suezmaxes, particularly from Greek investors.

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Pemex Promises to Fix Contaminated Crude Issue Affecting US Refiners in 10 Days

Petroleos Mexicanos (Pemex) expects to fix salt and water contamination in its crude oil shipments within 10 days after US refiners, particularly in Texas and Louisiana, reported quality issues affecting diesel and gasoline production. Pemex’s Dos Bocas refinery, Mexico’s largest, also halted operations in mid-December due to the problem. CEO Victor Rodriguez Padilla attributed the issue to malfunctions in Gulf of Mexico production platforms, while Mexican President Claudia Sheinbaum confirmed that repairs were underway. Pemex also announced plans to increase crude and condensate production to 1.8 million barrels per day over the next six years by drilling more than 2,000 new wells and conducting major infrastructure repairs. The company’s output fell to a three-year low of 1.76 million barrels per day in 2023.

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Exxon Expands Guyana Operations with Eighth Oil and Gas Project Permit Request

Exxon Mobil and its partners Hess and CNOOC have sought environmental permits for their eighth oil and gas project in Guyana, marking the first development focused on gas not linked to oil production. Exxon aims to boost production capacity to 940,000 barrels per day (bpd) in 2025 and exceed 1.7 million bpd by 2029. The Longtail project, expected to launch in 2030, could add 250,000 bpd of crude output and 1 billion cubic feet per day of gas. The consortium recently completed a gas resource appraisal, which may support Guyana’s plans for power generation and LNG production. Meanwhile, Exxon’s Yellowtail project is set to start operations soon, with additional projects—Uaru, Whiptail, and Hammerhead—slated to begin between 2026 and 2029.

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Sudan Seeks Russian and Chinese Investment to Revive War-Damaged Oil Sector

Sudan is seeking investments from Russia and China to rebuild its oil infrastructure, which has suffered over $22 billion in damages due to civil war, Energy Minister Mohieldien Naiem Mohamed Saied said. Key assets, including refineries, pipelines, and oil fields, have been affected. Saied met Russian and Chinese officials to discuss reconstruction, emphasizing Sudan’s resource wealth and investment potential. The ongoing conflict, which began in April 2023, led to the destruction of the Khartoum refinery, partly owned by China. Sudan plans to rebuild it and construct a new 120,000 bpd refinery in the war-free eastern region. Saied also expressed openness to Indian investment, stating that the war is nearing its end and companies are showing interest.

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Fuel Spill Contained After Tanker Bunkering Incident at Turkish Anchorage

A fuel spill occurred during the refueling of the Jag, a 70,000-dwt Liberian-flagged LR1 tanker owned by India’s Rhine Marine Services, at the Ahirkapi anchorage off Turkey. The spill originated from the vessel while it was being supplied by the 1,000-dwt bunker tanker Gokdeniz, owned by Seba Denizcilik Akaryakit of Istanbul. Turkey’s Directorate General of Coastal Safety (KEGM) responded swiftly, deploying multiple vessels—including rescue boats, an environmental barge, and a tug—to contain the pollution. Cleanup efforts were successful, and the water was cleared of contaminants. The Jag had previously been detained in Aqaba, Jordan, in August 2023 due to multiple safety deficiencies, including issues with its emergency generator, fire doors, engine room cleanliness, and propulsion systems. The tanker is insured by the West of England P&I Club. The cause of the spill is under investigation, with Rhine Marine Services yet to provide further details.

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Cosco Shipping Energy Expands Fleet with $480M Methanol-Ready Tanker Orders

Cosco Shipping Energy Transportation (CSET) is expanding its tanker fleet with a $480 million investment, ordering six methanol-ready vessels, including two aframaxes, two LR2s, and two panamax tankers. The orders will be placed with Cosco Shipping Heavy Industry and Yangzhou Cosco Shipping Heavy Industries. Additionally, CSET is raising $1.1 billion to fund the purchase of 11 more vessels, including six VLCCs, two LNG carriers, and three aframax tankers. The company has been actively securing newbuild contracts, with previous orders for VLCCs and LNG carriers at Dalian Shipbuilding Industry Co. Delivery timelines for the new tankers were not disclosed.