Oil Prices Slide as Trade War Clouds Demand Outlook

Oil prices fell in early Asian trading on Tuesday as trade tensions between the U.S. and China dampened global demand expectations. Brent crude futures dropped 25 cents to $65.61 a barrel, while U.S. WTI fell 18 cents to $61.87. A Reuters poll suggested that President Trump's tariff strategy could push the global economy into recession this year. China’s retaliatory tariffs against U.S. goods have escalated the trade war between the two largest oil consumers, leading analysts to lower their oil demand and price forecasts. Barclays on Monday cut its 2025 Brent crude forecast by $4 to $70 a barrel, citing heightened trade tensions and changes in OPEC+ output strategies. Several OPEC+ members are expected to propose accelerating output increases in June, potentially expanding the oil supply surplus. Oil analyst Philip Verleger said a substantial oil price drop is probable if exporting countries continue boosting production. Meanwhile, U.S. crude stockpiles likely rose by about 500,000 barrels last week, with inventory data from the American Petroleum Institute and the Energy Information Administration due this week.

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Trump Administration Sanctions Three Tankers for Supplying Oil to Houthis After Airstrikes

The Trump administration blacklisted three tankers and their owners for delivering oil to Yemen’s Houthi-controlled Ras Isa port shortly before U.S. airstrikes targeted the area. The vessels discharged their cargoes after the U.S. banned oil deliveries to Houthi ports on April 4, prompting financial sanctions. One of the tankers, White Whale, owned by Lebanon-based Great Success Shipping, was unloading during the airstrikes and later departed. Other sanctioned vessels included the Maisan, linked to former Russian oil exports, and the Tulip BZ, tied to Iranian petroleum transport. The U.S. accused the Houthis of selling oil at inflated prices to finance weapons purchases. Two previously sanctioned vessels, the Clipper and Akoya Gas, also delivered cargoes to Houthi ports. Eight commercial ships were reportedly present at Ras Isa during the U.S. attack. The U.S. Treasury vowed to continue targeting actors enabling the Houthis’ revenue generation and military operations.

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Greek Tankers Resume Russian Oil Shipments as Prices Dip Below G7 Cap

Greek shipowners are re-entering the Russian Urals oil market as prices have fallen below the G7-imposed $60 per barrel cap, allowing them to legally provide transport and insurance services, trading sources said. The price cap prevents Western firms from servicing Russian oil sold above $60 at the loading port. Since December 2022, most Western shipowners had avoided Russian crude due to higher prices keeping Urals oil near or above the cap. In April, Greek firms like Minerva Marine, Dynacom, and TMS Tankers resumed shipments, after being absent from the Russian market last year, according to shipping and trading sources. These Greek companies did not respond to Reuters' requests for comment. Global trade tensions have pressured oil prices this spring, pushing Urals crude below $60 per barrel, making Western shipping feasible again. Reuters' data shows Urals cargoes from Baltic ports and Novorossiisk were valued just over $50 per barrel as of April 24. Of 25 Urals-loaded tankers in April, 15 were managed by Greek firms, according to LSEG data and industry sources.

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India Ramps Up Russian ESPO Oil Purchases as Chinese Demand Weakens

India boosted its purchases of Russia’s ESPO Blend oil in April to the highest level since August 2024, taking advantage of reduced Chinese demand, according to LSEG and traders' data. ESPO Blend, Russia’s light crude favored by Chinese refiners, saw lower Chinese buying due to sanctions and refinery maintenance, freeing up more supply. Indian ports received about 400,000 metric tons of ESPO in April, a sharp rise from just one cargo in March. Traders noted that the softened Chinese appetite prompted increased ESPO offers to Indian buyers. Normally less attractive to India because of higher logistics costs and pricing compared to Urals crude, ESPO has become more competitive due to weak international oil prices. Another 200,000 metric tons of ESPO are expected to arrive in India in May, suggesting a potential further increase in imports. Prices below the $60-per-barrel Western cap also make ESPO purchases easier for Indian refiners. However, China's Sinopec resuming ESPO buying in May could impact India's opportunity to expand its intake.

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US Tariff Uncertainty Forces VLCC Crude Cargoes Bound for China to Divert to Southeast Asia

Uncertainty over potential US tariffs is causing crude oil shipments originally intended for China in May to be diverted or cancelled, with two VLCCs — Agios Nikolas and Yuan Gui Yang — now headed toward Singapore and Malaysia instead of China. Both ships, carrying around 2 million barrels of WTI Midland crude each and chartered by ExxonMobil, had loaded from the US Gulf Coast in March for May delivery to China. Vessel tracking data indicates neither has declared China as their final destination, suggesting changes were made before departure amid tariff fears. Five more VLCC voyages from the US Gulf Coast to China are also at risk of cancellation or diversion depending on tariff developments. In March, China's surplus crude reached a nine-month high, driven by surges in imports from Iran and Russia as refiners rushed to secure supply before new US sanctions. Imports from Iran alone jumped to a five-month high of 1.71 million barrels per day in March, up 20% from February, while Russian crude imports also rose as refiners shifted to non-sanctioned shipping routes. March’s import surge coincided with declining global oil prices, with Brent futures falling from $82.63 in January to under $70 in March. Meanwhile, China is reportedly considering exempting certain US goods from its 125% retaliatory tariff, though it remains unclear whether crude oil will be included.

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VLCCs Carrying Mixed Chinese and Russian Oil Raise Destination Mysteries

Two VLCCs controlled by Chinese interests are on unusual voyages carrying a rare combination of Chinese crude and condensate mixed with Russian naphtha. The Marshall Islands-flagged Crystal loaded at the Prosperity terminal in the Bahamas and is currently stopped near Georgetown, Guyana. Meanwhile, the Gabon-flagged Norns loaded Chinese crude at Dongjiakou and later picked up Russian naphtha via ship-to-ship transfer at Tanjung Bruas, now signaling for Angra dos Reis, Brazil. However, These locations are unlikely final destinations, suggesting the cargoes are being used for a specialised blending purpose elsewhere. This blending could be intended to condition heavy crude grades in different markets, though the exact target is unclear. Crystal is operated by Vast Mighty of Hong Kong, while Norns is managed by China’s Sino Navigation Ship Management. Both vessels have undergone ownership and name changes recently, with Crystal formerly owned by Bahri and Norns previously operated under NYK.

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Sinopec's First-Quarter Net Profit Drops 28% Amid Weaker Fuel Sales and Thin Margins

China's Sinopec Corp reported a 27.6% drop in first-quarter net income to 13.26 billion yuan ($1.82 billion), hurt by lower oil prices, sluggish fuel sales, and thin refining margins. Gasoline consumption faced pressure from rising electrification, while diesel demand remained weak due to China's slow economic recovery. Overall, China's refined fuel demand declined 4% year-on-year, and Sinopec’s crude oil throughput slipped 1.8% to 62.13 million metric tons. Total refined fuel sales fell 7.1%, with domestic sales down 5.3% to 43.2 million tons. Ethylene output rose 17.7% to 3.86 million tons, but the chemical division still recorded a quarterly loss of 1.32 billion yuan amid persistently low margins. Crude oil production declined 1.2% to 69.53 million barrels, while natural gas output grew 5.1% to 368.4 billion cubic feet. Capital expenditure fell to 18.25 billion yuan, with 70% focused on upstream oil and gas projects like Jiyang, Tahe, and Fuling shale gas. Despite these challenges, Sinopec’s Hong Kong-listed shares edged up 0.25% on Monday but have dropped 11.5% so far this year.

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Tankers Jam Venezuela’s Aging Port as Firms Rush to Load Oil Ahead of US License Deadline

Tankers are lining up near Venezuela’s old La Salina terminal as companies rush to load crude oil before the May 27 expiration of U.S. licenses allowing Venezuelan exports. Venezuela is preparing to export a new crude grade, Blend 22, made from a mix of state oil firm PDVSA’s Western fields. La Salina’s poor infrastructure and shallow waters force vessels to load smaller cargoes and risk oil-stained hulls. Despite these risks, buyers are accepting delays to secure cargoes ahead of tightening U.S. sanctions. Trading house Vitol is among those involved, loading Blend 22 for France’s Maurel & Prom and preparing for possible follow-up shipments. Meanwhile, PDVSA has shifted to using nearby Bajo Grande terminal for floating storage after canceling Chevron’s cargo allocations. Several Chevron-chartered ships remain anchored near Aruba, awaiting new instructions. Venezuela’s government has condemned the renewed U.S. sanctions as part of an ongoing "economic war."

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Saudi Arabia Set to Raise June Oil Prices to Asia Amid Stronger Demand and Rising Benchmarks

Saudi Arabia is expected to increase its official selling prices (OSPs) for crude oil to Asia in June, ending a three-month streak of price cuts. Refiners forecast that Arab Light crude could rise by 10 to 30 cents per barrel, bringing the premium to around $1.30–$1.50 above the Oman/Dubai average. The May price cuts had brought Saudi crude prices close to their lowest in four years following OPEC+’s surprise decision to advance production hikes. The fall in prices spurred increased Chinese purchases of Middle Eastern oil, boosting regional demand and tightening supply. Middle East crude benchmarks, particularly Dubai, have since risen by about 40 cents per barrel. However, the possibility of further OPEC+ production increases in June could curb any significant price gains. June prices for other Saudi grades, such as Arab Extra Light and Arab Medium, are also expected to rise by at least 25 cents per barrel. The final OSPs are typically announced around the 5th of each month and influence crude pricing for much of Asia.

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Asyad Shipping Moves on $205M VLCC Purchase After IPO Boost

Following a $333m IPO cash raise, Oman’s Asyad Shipping is reportedly acquiring two modern VLCCs from Chinese investors for $205m. The vessels, Landbridge Wisdom (built 2020) and Landbridge Glory (built 2019), were owned by Huwell Group and technically managed by Heidmar. The ships’ original Chinese financing and construction may have prompted the sale amid new US trading restrictions on Chinese-built vessels. Some brokers also suggest that OPEC’s production hikes are boosting buying interest for such tankers. Both VLCCs are scrubber-fitted and currently under charters with BP and Clearlake, respectively, expiring by mid-2025. Asyad had announced plans earlier this year to expand its fleet by about one-third, adding 30 new vessels with a $2.7bn investment funded by bank loans. The company’s recent IPO on the Muscat Stock Exchange raised OMR 128.1m ($332.8m) to support this expansion. If completed, the deal will leave Huwell with three similar VLCCs, while Heidmar continues growing its technical management business after last year's acquisition of Landbridge Ship Management.

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VLCCs Burning VLSFO Face $21,400 Daily Carbon Cost Under New IMO Rules

Clarksons Securities has calculated that ships burning very low-sulphur fuel oil (VLSFO) will face significant carbon costs following the IMO’s decision to impose a global bunker-intensity standard starting in 2028. Ships over 5,000 gt must use fuel that is at least 17% less carbon-intensive than VLSFO by 2028, tightening to 43% by 2035, meaning vessels continuing with VLSFO will effectively pay for compliance. Analysts estimate a VLCC consuming 44 tonnes of VLSFO per day would pay about $4,700 daily in carbon charges by 2028, rising to $21,400 by 2035. A kamsarmax bulker burning 23 tonnes of VLSFO would incur $2,500 daily initially, increasing to $11,200. Clarksons said older, less efficient vessels may face eroded earnings and faster scrapping, boosting demand for dual-fuel newbuilds using LNG, methanol, or ammonia, or ships blending certified biofuels. Slow steaming or energy-saving retrofits, while cutting total emissions, won’t help with compliance as only fuel mix matters under the new rules. Green fuels like bio-LNG, green methanol, and green ammonia will generate surplus compliance credits, while grey LNG will face penalties starting 2031. Charterers are already paying premiums for greener vessels, with Belgian owner CMB.Tech securing long-term charters for ammonia-ready newcastlemaxes at elevated rates.