Oil Prices Rebound Nearly 2% on Iran Sanctions and Equity Market Rally

Oil prices climbed nearly 2% on Tuesday as new U.S. sanctions on Iran and a rebound in equity markets helped offset prior losses. Brent crude rose $1.18 to settle at $67.44 per barrel, while expiring WTI May futures gained $1.23 to $64.32, with the June contract also up 2% at $63.47. Monday's oil selloff stemmed from signs of progress in U.S.-Iran nuclear talks and market jitters over President Trump's criticism of Fed Chair Powell. However, new U.S. sanctions targeting an Iranian oil shipping network reignited concerns about reduced Iranian crude exports. Analysts warned that failure to reach a nuclear deal could push Iran’s oil flows toward zero. Equities also rebounded on hopes of easing U.S.-China trade tensions, though officials cautioned that negotiations remain challenging. Concerns over tariffs and global economic slowdown have pressured oil prices recently, with the IMF cutting its global growth outlook. Meanwhile, U.S. crude stockpiles reportedly fell by 4.6 million barrels last week, supporting bullish sentiment ahead of official inventory data.

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VLCC Rates Surge to Four-Week High on Sanctions and Pre-Holiday Demand

Spot rates for VLCC have climbed to four-week highs, fueled by increased cargo activity ahead of Easter and tighter sanctions on Iranian oil. The Baltic Exchange reported rates from the Middle East to Asia at $48,600 per day on Monday, while Clarksons Securities pegged them higher at $57,800. Greek consultancy Novisea linked the spike to holiday demand and speculative moves following renewed US sanctions, which are pushing Asian refiners to diversify sourcing and lengthening voyage distances. US investment bank Jefferies observed “elevated activity,” with eco VLCCs surpassing $50,000 per day, and noted that new Opec+ quotas, especially a 200,000 bpd hike from Saudi Arabia, could further support rates. Spot rates from West Africa to China have also improved modestly. Analysts caution that sustainability of current rates depends on market behavior post-holiday and upcoming geopolitical developments. The shrinking orderbook and shifting trade routes are seen as long-term supports for high VLCC earnings. Overall, vessel utilization has risen from 83% to 90% in the past six months, strengthening the floor in rates and indicating strong short-term upside.

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Venezuela Blocks Chevron Oil Shipments Amid Rising US Sanctions

Venezuela’s state oil firm PDVSA has revoked permission for Chevron to load crude oil cargoes, requesting that several tankers return their shipments. Despite the U.S. extending Chevron’s license to operate in Venezuela until May 27, PDVSA reversed its authorization in early April. One aframax, the Carina Voyager, returned and discharged 511,000 barrels of Merey crude after loading. Another tanker, Dubai Attraction, also remains idle after loading 340,000 barrels, with PDVSA reportedly demanding its cargo back as well. In total, up to four more tankers could be blocked from loading as planned. These developments follow tightened U.S. sanctions under the Trump administration aimed at restricting Venezuelan oil exports and punishing third-party buyers. Analysts now expect Venezuela’s crude output to fall to around 800,000 barrels per day by May. UK broker Braemar warned the disruption could lead to a surplus of idle crude tankers in the Atlantic, calling it a major escalation in the U.S.-Venezuela standoff.

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Reliance Industries Ups Russian Oil Imports by 17% in March Despite Lower Overall Intake

India's Reliance Industries increased its imports of Russian oil by 17.3% in March, reaching approximately 532,700 barrels per day, according to ship-tracking data from industry sources. Russian crude made up 48.5% of Reliance’s total crude imports during the month. This rise comes even as the company’s overall oil imports dropped by about 19% to 1.1 million bpd ahead of a scheduled maintenance shutdown at one of its refineries. The surge underscores the growing energy ties between India and Russia amid global shifts in oil supply chains. Rosneft, Russia’s state oil giant, has an agreement to supply nearly 500,000 bpd to Reliance in what is the largest energy pact between the two nations. Reliance operates the world’s largest refining complex in Jamnagar, Gujarat. The data highlights Reliance’s continued pivot towards discounted Russian crude despite Western sanctions. The sources of this information remained anonymous as they were not authorized to speak publicly.

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Saudi Arabia and India to Build Two Oil Refineries, Deepen Strategic Ties

Saudi Arabia and India have agreed to establish two new oil refineries in India through a joint venture, signaling a significant step toward deeper energy cooperation. This development was announced by India’s Ambassador to Saudi Arabia following a meeting between Crown Prince Mohammed bin Salman and Prime Minister Narendra Modi in Jeddah. The deal comes amid global economic uncertainty and aims to boost energy security and economic growth for both countries. Although Saudi Arabia had previously pledged $100 billion in investments in India, only about $10 billion has been realized so far. Past efforts by Saudi Aramco to enter India’s refining sector have faced setbacks, including stalled projects due to land and valuation disputes. It is currently unclear whether Aramco will participate in the newly planned refineries. The agreement also includes broader cooperation in tourism and technology. As Saudi Arabia’s share in India’s oil market declines due to rising Russian and Iraqi imports, this move could help restore its influence.

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North Dakota Oil Prices Near Breakeven Amid Market Turmoil, Regulator Warns

North Dakota oil prices are hovering near breakeven levels due to market volatility driven by global trade tensions, according to state oil and gas regulator Nathan Anderson. The state, the U.S.'s third-largest oil producer, relies on higher crude prices to maintain profitability due to its aging oilfields. Breakeven costs in the Bakken shale range from $50 to $60 per barrel, compared to $38–$42 in the more cost-efficient Permian Basin. WTI crude closed at $64.32 on Tuesday, up 2% but still $7 below early April levels. Bakken crude sold at an 80-cent discount to WTI at Clearbrook, Minnesota. Anderson said companies may soon push for service cost reductions as prices slide into the low $60s. North Dakota's rig count held steady at 32, though two may be dropped in 2025 due to pre-set budgets. February oil production dropped by 11,000 barrels per day due to extreme cold, though Anderson expects a price rebound once the effects of sanctions and tariffs are clearer.

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California Faces Fuel Squeeze as Refineries Shut Down, Imports Rise

California is set to lose nearly 20% of its oil-refining capacity within a year as Valero and Phillips 66 plan to shut down a combined 284,000 barrels per day of processing operations. These closures, along with earlier refinery conversions, will bring the state's total refining loss since 2020 to about 570,000 barrels per day—roughly one-third of its capacity. The reduced supply is expected to tighten fuel markets further and drive gasoline prices even higher, which already average nearly $5 per gallon in the state. Regulatory burdens, high costs, and environmental mandates have made it harder for refiners to operate profitably in California. To compensate for the supply gap, California will likely rely more on fuel imports from Asia and neighboring regions, similar to the U.S. East Coast's shift to overseas gasoline after local refinery closures. Governor Gavin Newsom has urged regulators to maintain collaboration with refiners to ensure a reliable fuel supply. Remaining refiners, such as Chevron and PBF, may benefit from higher margins due to less competition. Phillips 66 plans to support California’s fuel needs through imports and infrastructure assets after its Los Angeles refinery shuts down later this year.

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US Port Fee Revisions Slash Industry Impact but Raise Costs for Chinese Operators

Revised US port fee proposals have significantly reduced the financial burden on global shipping, with Clarksons Research estimating only 9% of US port calls in 2024 will be affected, down from 43% under earlier plans. The new rules could generate $12 billion in annual fees by 2026 and up to $18 billion by 2028—far less than the previously feared $40–$52 billion. Key exemptions now include bulkers under 80,000 dwt, tankers under 55,000 dwt, and container ships with less than 4,000 TEU capacity. Exports are also largely exempt, preserving vital global trade flows of products like LPG, chemicals, and dry bulk. While Chinese-built and -operated vessels will face higher charges, the overall scope has narrowed, lowering pressure on the broader market. For example, a 15,000 TEU boxship will pay about $1.33 million per US call in 2025, compared to $3.7 million for a similar Chinese-operated vessel. Analysts expect these costs to be passed to customers via surcharges, especially in container shipping. The narrowed focus reduces disruption risk and allows shipowners to strategically reassign vessels to minimize fees.