Oil Prices Climb on Signs of Rising Demand in China, Europe and Falling U.S. Output

Oil prices edged up on Wednesday as U.S. production showed signs of weakening and demand picked up in Europe and China. Brent crude rose 0.6% to $62.52 per barrel, while U.S. WTI gained 0.74% to $59.53. The gains came after both benchmarks hit four-year lows, triggered by OPEC+’s decision to accelerate output increases and market fears of oversupply. In response to falling prices, U.S. firms like Diamondback Energy and Coterra Energy announced rig cuts, suggesting a potential output decline. The American Petroleum Institute reported a 4.5 million barrel drop in crude stocks for the week ended May 2, reinforcing supply concerns. Analysts expect U.S. government data to confirm an 800,000 barrel draw. On the demand side, Chinese consumer spending surged during the May Day holiday, and European companies are showing better-than-expected earnings. Meanwhile, the Federal Reserve is expected to keep interest rates steady amid economic uncertainty driven by tariffs.

___________________________________

Pemex 2025 Crude Output Target Falls Short of Mexico’s Official Goal

Mexican state oil company Pemex has set a 2025 crude oil production target of 1.58 million barrels per day (bpd), according to a recent filing with the U.S. SEC. This figure is lower than both Pemex's current output and President Claudia Sheinbaum's stated goal of 1.8 million bpd. In its Q1 earnings report, Pemex reported production of 1.62 million bpd, including crude oil and condensate. Despite this, the company said it is still aiming to reach the 1.8 million bpd mark by the end of 2025. Challenges to achieving this include declining output from aging Gulf of Mexico fields. New discoveries have not produced enough to offset these losses. President Sheinbaum has made increasing oil output a key policy priority. However, the latest targets indicate Pemex may fall short without significant new production capacity.

___________________________________

EU Plans New Sanctions Targeting Russia’s ‘Shadow’ Oil Tankers

The European Union is preparing a new sanctions package aimed at Russia’s "shadow fleet" of oil tankers, which are used to evade existing sanctions and price caps. The proposed sanctions, to be unveiled by the European Commission, target 60 individuals and entities and include restrictions on 150 vessels, raising the total number of sanctioned ships to over 300. These measures come as Moscow has relied on aging, often uninsured tankers to continue exporting oil to global markets, despite European sanctions. The sanctions are part of the EU's ongoing efforts to curb Russia's energy revenues in response to its war in Ukraine. The foreign ministers of the EU aim to approve the measures at a meeting in Brussels on May 20. While EU sanctions require unanimous approval from all member states, the EU is exploring ways to pass sanctions with a qualified majority to avoid delays. Hungary has previously threatened to veto such measures but backed down each time. The bloc is also considering trade measures to sidestep the need for unanimous consent.

___________________________________

Sinokor Sells VLCC Pacific Loyalty to Chinese Buyers for $42M Profit

South Korea's Sinokor Merchant Marine has sold its VLCC Pacific Loyalty (built 2006) to Chinese interests for $42 million, securing a notable profit. Sinokor had acquired the 307,000-dwt tanker from Ridgebury Tankers in 2022 for $32.75 million. The vessel was briefly refinanced through a sale-and-leaseback arrangement with SPDB Financial Leasing before being repurchased. Valuation platform VesselsValue estimates the tanker is worth around $41.75 million. Pacific Loyalty was operated by Lucky Maritime, a joint venture between Sinokor and Trafigura, a global trading company. Sinokor still holds 18 VLCCs and recently expanded its term cover amid rising spot rates. Recent comparable sales include Eurotankers’ Eurohope (sold for $46.25 million) and a $205 million deal for two modern VLCCs by Asyad Shipping. The Sinokor–Trafigura VLCC alliance appears active, with communication directed to Lucky Maritime for new crude cargo opportunities.

___________________________________

George Economou Tanker Carries Senegal’s First Bonny Crude Cargo in a Decade

George Economou’s Cardiff Marine has deployed its 158,500-dwt suezmax Petalidi to lift Senegal’s first Nigerian Bonny Light crude cargo since 2015. The vessel departed Bonny Island and is en route to Dakar’s SAR refinery, with arrival expected on May 11. Shell is the charterer, and analytics firm Kpler confirmed the refinery typically processes Erha crude, which is similar to Bonny Light. The move suggests a strategic shift in crude sourcing by Senegal. Although the government hoped to transition the SAR refinery to use domestic Sangomar crude, only one such cargo has been delivered so far. Sangomar field, operated by Woodside Energy and Petrosen, reached a record 140,000 bpd output in April, surpassing its 100,000 bpd nameplate capacity. Despite this, continued imports like Bonny Light show Senegal remains reliant on foreign crude. Economou has been active in African tanker trades, with his suezmax Toska recently carrying Sudan’s first Dar crude cargo in a year after the lifting of force majeure.

___________________________________

Ghana Imports First Angolan Crude as Sentuo Refinery Resumes Operations

The Greek suezmax Nicolaos, operated by Andriaki Shipping, delivered Ghana’s first Angolan crude cargo, signaling the restart of operations at the new Sentuo refinery. The 165,000-dwt vessel loaded 500,000 barrels of Palanca crude on April 25 and was scheduled to discharge at Tema between May 3–5. This shipment marks the resumption of crude imports after a six-month pause likely caused by financial and political challenges. The refinery, with a capacity of 120,000 bpd, had previously received crude from Russia and the Ivory Coast’s Baleine field. Ghana’s dependency on imported refined fuels could be reduced with the renewed operations at Sentuo. In February, the country recorded a record-high 480,000 tonnes in gasoline and diesel imports. Reduced imports of refined products could impact clean tanker demand. Ghana operates two refineries — Sentuo and the inactive 40,000-bpd Tema Oil Refinery — and previously received emergency crude from Nigeria for power generation.

___________________________________

Product Tanker Rates Slide Amid Fixture Cancellations and Tonnage Buildup

Product tanker rates declined this week as failed fixtures and a growing tonnage list weighed on the market. Clarksons Securities reported that LR2 earnings dropped 3% to $28,800 per day, LR1 rates fell 8.1% to $23,400, and MR rates slid 10.5% to $20,500. Analysts cited low chartering activity and several cancellations, particularly in the LR segment, which disrupted the previously balanced market. A few LR2 vessels switching to dirty trades helped limit the oversupply. MR earnings had initially risen last week, but a slowdown in Western demand has since softened the market. On a positive note, refinery margins have reached their highest levels in over a year, supported by lower crude prices after OPEC+ output news. This could boost cargo flows as refineries ramp up post-maintenance to meet summer demand. Fearnley Securities remains optimistic, citing low risk of peace in Ukraine or restored Red Sea transit, and believes higher crude output could bolster clean tanker demand through knock-on effects.

___________________________________

Putin and Xi to Discuss Energy Ties, Focus on Power of Siberia 2 Pipeline

Russian President Vladimir Putin and Chinese President Xi Jinping are set to discuss key energy issues during Xi’s four-day official visit to Moscow. A major topic will be the proposed Power of Siberia 2 gas pipeline, which would deliver Russian gas to China via Mongolia. Kremlin aide Yuri Ushakov confirmed energy cooperation will be a central focus of the talks. Russia, now China’s largest oil and gas supplier, is looking to deepen ties with Beijing as it shifts away from European markets. The Power of Siberia 2 pipeline is planned to carry up to 50 billion cubic meters of gas per year. However, experts say China may not require additional gas until after 2030. A key unresolved issue remains the price of natural gas for the pipeline. Xi is among several world leaders attending celebrations in Moscow marking the 80th anniversary of Nazi Germany’s defeat.

___________________________________

IMO Fuel Penalties Could Cost Shipping $1 Trillion Over 10 Years, MSI Warns

The International Maritime Organization's (IMO) proposed carbon intensity rules could add up to $1 trillion in costs to the global shipping industry over the next decade, according to research by Maritime Strategies International (MSI). Starting in 2028, ships over 5,000 gross tons must reduce fuel carbon intensity by 17% compared to very low-sulphur fuel oil (VLSFO), with the target rising to 43% by 2035. MSI estimates this will equate to an 82% premium on current bunker fuel costs, or roughly $100 billion annually. These costs represent both a penalty and an investment opportunity in lower-carbon alternatives such as biofuels. MSI’s “Seascape” platform, which models fleet behavior using machine learning, informed these projections by analyzing fuel use and emissions. Clarksons Securities echoed these findings, highlighting that continuing to use VLSFO will become a costly compliance strategy. They estimate that carbon charges could reach $21,400/day for a VLCC and $11,200/day for a kamsarmax bulker by 2035. MSI's tool also tracks fleet emissions during “dark periods” when AIS data is unavailable, improving asset valuation and due diligence for operators and investors.