Oil Logs Weekly Gain Amid Easing Trade Tensions, But Faces Supply Pressures

Oil prices rose on Friday, with Brent settling at $65.41 and U.S. WTI at $62.49, both up around 1.4%, marking the second consecutive weekly gain. Brent gained 1% and WTI 2.4% for the week, buoyed by reduced U.S.-China trade tensions as the two nations agreed to a 90-day pause on tariffs. However, expectations of increased oil supply from Iran and OPEC+ capped further price gains. A potential U.S.-Iran nuclear deal remains a key market focus, with analysts estimating Iran could add up to 400,000 barrels per day if sanctions are lifted. OPEC+ is also expected to raise output, prompting analysts to warn of a renewed "bear trade" unless seasonal demand strengthens. Talks between Kyiv and Moscow failed to yield a ceasefire, while Israel's strikes on Yemen added geopolitical risk. U.S. oil rigs fell by one to 473 this week, signaling slight pressure on domestic output. Meanwhile, a stronger U.S. dollar, driven by higher import prices and weak consumer sentiment, may limit further oil price upside.

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China Overtakes U.S. as Top Buyer of Canadian Crude via Trans Mountain Pipeline

China has become the largest buyer of Canadian crude oil shipped through the expanded Trans Mountain (TMX) pipeline, according to ship tracking data, as U.S.-China trade tensions and sanctions reshape global energy flows. Since the pipeline’s capacity tripled to 890,000 barrels per day in May 2024, China has averaged 207,000 bpd in imports— a sharp rise from just 7,000 bpd over the prior decade. In contrast, the U.S. took about 173,000 bpd from the pipeline during the same period. The shift is fueled by U.S. President Donald Trump’s trade war with Canada and broader sanctions on Russian and Venezuelan oil, prompting China to seek alternative sources. Canada, though exempt from U.S. oil tariffs, is diversifying exports after facing brief duties and political uncertainty from Washington. TMX was only 77% utilized in 2024 due to high tolls but is expected to reach 84% in 2025 and 92% by 2027. Other Asian nations — including South Korea, Japan, and India — have also begun buying Canadian crude. Analysts expect any future TMX capacity expansions to serve primarily Asian markets, with China poised to remain a key customer.

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China’s Jet Fuel Exports Hit 13-Month High in April as Crude Imports Surge

China’s aviation fuel exports rose to a 13-month high of 1.89 million metric tons in April, marking an 18.6% year-on-year increase, according to customs data. This surge came as China ramped up crude oil imports by 7.5%, partly driven by purchases of sanctioned Iranian and Russian supplies. Despite the April jump, jet fuel exports for the first four months were down 2% year-on-year at 6.27 million tons. Gasoline exports rose sharply 93.7% from a low base to 780,000 tons, but fell from March’s 930,000 tons, bringing the year-to-date total to 2.42 million tons, down 22.6%. Diesel exports continued to slide, plunging 32.3% year-on-year in April to 510,000 tons, with year-to-date exports dropping 42%. Total refined product exports, including gasoline, diesel, jet fuel, and marine fuel, increased 10.1% to 5.01 million tons in April. In contrast, LNG imports fell 24.8% year-on-year in April to 4.64 million tons, contributing to a 22.4% decline for the first four months. The figures highlight shifting dynamics in China's energy trade amid geopolitical factors and domestic consumption trends.

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New Russian Oil Transfer Hotspot in Kitovy Bay Sees Aframaxes Load VLCC

An Indian VLCC, the Big Star, conducted the first recorded ship-to-ship transfer of Russian ESPO crude in Kitovy Bay off Russia’s Pacific coast between May 11 and 13. The 319,000-dwt VLCC received about 700,000 barrels each from two aframaxes, the Lefkada and the Kai Fu. This activity comes amid increased clandestine transfers of Eastern Russian crude in response to tightening sanctions. The VLCC Big Star is operated by Gama Link Tech Services in India, while the aframaxes are operated by companies based in India and China, respectively. Frequent name and flag changes characterize these vessels, complicating tracking. Similar sanctioned crude transfers were spotted off Malaysia and Hong Kong earlier this year, involving Russian ships offloading to non-sanctioned tankers. These ship-to-ship operations have become a workaround to continue Russian oil exports despite international sanctions. Kitovy Bay now emerges as a significant new hub for such transfers in the Pacific region.

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Discounts on Russia’s Urals Oil Widen Slightly for June Deliveries to India

Russian Urals crude cargoes loading in June are selling at slightly wider discounts of $2.70–$3.10 per barrel to dated Brent at Indian ports, compared to $2.50–$3.00 for May deliveries. Traders say the marginal drop in prices is due to greater availability of alternative crude supplies. The OPEC+ decision to boost output by 411,000 barrels/day in June is adding to overall supply pressure. Spot premiums for Russia’s ESPO Blend crude headed to Asia also fell amid increasing regional supply. Despite the discounts, Urals oil on a FOB basis from Russia remains under the $60 Western price cap, restricting revenue for Russian sellers. India continues to be the largest seaborne buyer of Russian oil, maintaining strong import levels. To support these imports, India has authorized more Russian insurers to cover oil-carrying vessels. The discount trend reflects a shifting global oil market influenced by geopolitical dynamics, supply increases, and evolving buyer preferences.

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EU Plans Tougher Sanctions on Russia, Including Third-Party Banks and Energy Assets

The European Union is preparing a new sanctions package targeting Russia’s financial sector and third-party banks aiding Moscow’s war efforts. European Commission President Ursula von der Leyen emphasized the need to pressure President Putin into peace negotiations. Despite a recent meeting between Kyiv and Moscow in Istanbul, Ukrainian President Zelenskiy dismissed Russia’s delegation as unserious. EU officials expressed skepticism about Russia’s commitment to peace, calling for more ambitious sanctions. The upcoming package may also include measures against the Nord Stream pipelines, a lower oil price cap, and further actions on Russia’s shadow fleet. This follows the recently adopted 17th sanctions package targeting individuals, tankers, and energy evasion networks. All 27 EU member states must approve the new measures. The EU and Ukraine continue to demand an unconditional 30-day ceasefire, which Putin has yet to accept.

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Russia Detains Greek-Managed Tanker in Baltic Amid Rising Regional Tensions

Russia intercepted the Greek-managed tanker Green Admire carrying Estonian fuel oil while sailing through Russian waters near the island of Gogland. The vessel, owned by Piraeus-based Aegean Shipping Management and flagged in Liberia, was en route to Rotterdam with a cargo of shale oil. This incident is seen as a tit-for-tat response to recent Baltic states’ interceptions of Russian-trading vessels suspected of sabotage or environmental violations. Russia had earlier demonstrated force by sending a fighter jet to deter Estonian forces from detaining another tanker, Argent, near Primorsk. The Baltic states have increasingly enforced stricter maritime security, passing new laws to enable seizure of Russian vessels considered substandard. Russia views these actions as hostile attempts to weaken its trade and military efforts in Ukraine. Despite agreed shipping routes through Russian waters to avoid shallow Estonian passages, tensions continue to rise. The situation highlights growing maritime friction in the Baltic amid geopolitical struggles and competing national interests.

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Suezmax Tankers Overtake Aframaxes as Dominant Vessels for Black Sea Crude Exports

Signal Group reports that suezmax tankers have become the preferred choice for transporting crude oil from the Black Sea, particularly for CPC pipeline exports of Kazakhstan crude near Novorossiysk, Russia. These larger million-barrel vessels are now handling the majority of CPC business, surpassing the smaller aframax tankers. The shift is driven by increased crude production, including Chevron’s Tengiz expansion, and the logistical advantages of suezmaxes, such as lower per-barrel freight costs and better port efficiency. Signal noted that the first quarter of 2025 saw the highest volume of million-barrel loadings in four years. Growing demand from long-haul markets in Asia, including India and China, also supports suezmax use, as these ships can handle longer voyages more economically. Currently, suezmaxes account for 63.4% of CPC cargoes, with aframaxes at 36.6%. Though there may be a short-term rise in aframax activity due to inventory or port issues, the overall trend favors suezmax dominance. This change also reflects fleet optimization amid geopolitical complexities, particularly concerns about Russian crude blending in CPC shipments.

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Exxon, Adnoc to Expand Upper Zakum Offshore Field Amid UAE’s Oil Growth Push

ExxonMobil and Abu Dhabi National Oil Co. (Adnoc) have agreed to expand capacity at the offshore Upper Zakum oil field, which already produces over 1 million barrels per day, though no new target was disclosed. Japan’s Inpex is also a partner in the project. The expansion comes despite UAE's OPEC+ quota limiting actual production to around 3.1 million barrels per day, leaving much of its 4.85 million bpd capacity underused. Adnoc is pursuing a $150 billion investment plan to raise capacity to 5 million bpd and become self-sufficient in natural gas. During a high-level meeting in Abu Dhabi, Adnoc also announced plans with Occidental Petroleum to increase output at the Shah Gas field and to partner on a U.S. carbon capture project to enhance oil recovery. Adnoc’s international arm, XRG PJSC, will join the initiative, while EOG Resources received rights to explore unconventional oil in Abu Dhabi. These projects represent $60 billion in potential U.S. investment in the UAE. UAE energy investments in the U.S. are projected to rise from $70 billion to $440 billion by 2035.

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Nigeria’s Renaissance Energy Shuts Pipeline After Spill Incident in Ogoniland

Nigerian oil company Renaissance Energy has halted production on a pipeline connected to the Trans Niger Pipeline (TNP) following an operational incident. The TNP, with a 450,000 barrels per day capacity, is a key route for Bonny Light crude exports. The affected line runs through B-Dere community in Ogoniland, where a pipeline burst on May 6, marking the second such incident in two months. Renaissance, which acquired Shell’s former onshore subsidiary, said it immediately isolated the pipeline and stopped production to limit environmental damage. The company, in cooperation with locals, clamped the line, recovered spilled oil, and is preparing for cleanup. An investigation confirmed the issue was operational rather than due to sabotage. Environmental rights groups have raised concerns about repeated spills and their effects on local communities. This disruption highlights ongoing infrastructure and environmental challenges in Nigeria's oil sector, the largest in Africa.

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Cosco Shipping Expands VLGC Fleet with Dual-Fuel Newbuild Orders

China Cosco Shipping is ramping up its presence in the liquefied petroleum gas (LPG) segment, adding two more 88,000-cbm dual-fuel VLGCs to its orderbook at Cosco Heavy Industry Qidong Offshore, bringing the total to four vessels. The ships, capable of carrying both LPG and ammonia, are designed with type A independent cargo tanks and will feature dual-fuel engines (LPG/conventional) and shaft generators. The first two newbuildings are slated for delivery in 2026, with the remaining pair in 2027. While pricing hasn't been confirmed, brokers at Clarksons estimate each vessel costs around $120 million. The expansion reflects rising domestic demand for gas in China. Cosco, traditionally focused on smaller LPG carriers under 6,000 cbm for coastal trade, entered the VLGC market in 2022 with the acquisition of the 83,000-cbm Chang Xing Yuan (ex-Gas Aries). This move aligns with Cosco's broader fleet renewal strategy, which includes over 100 newbuildings ordered last year and ongoing inquiries for more than 70 additional ships across sectors.

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VLGC Rates Surge Past $50,000 Amid Trade Truce and Tighter Supply

Very Large Gas Carrier (VLGC) spot rates have surpassed $50,000 per day for the first time in seven months, driven by easing US-China trade tensions and tightening vessel supply. Saudi Arabia to Japan routes now pay $51,800 per day, with US Gulf to Japan voyages close behind at $49,500. Fearnleys reported high Middle East Gulf activity, even before Aramco’s cargoes hit the market. In the West, chartering progress is slower due to a $3–$5 per tonne rate gap. A 90-day pause in US-China tariffs widened arbitrage opportunities and lifted rate expectations. China has reduced LPG import tariffs from 125% to 10%, while the US dropped levies on Chinese goods to 30%. In April, US LPG exports to China reached a three-month high, though May volumes dipped in anticipation of tariffs. Market optimism has grown that the tariff relief and possible ethane import waivers will boost Chinese demand for US LPG.

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Teekay First to Implement ZeroNorth-DNV Emissions Reporting System

Teekay Tankers has become the first shipping company to implement a new end-to-end emissions reporting and verification solution developed by ZeroNorth and DNV. The system integrates ZeroNorth’s vessel analytics with DNV’s Veracity and Emissions Connect services to enhance regulatory compliance and data quality. Teekay adopted the platform across its crude and shuttle tanker fleet after extensive testing and feedback collaboration. The service simplifies reporting by automating verification alerts and engaging directly with crews to resolve data issues. Following Teekay’s adoption, the platform has been rolled out to two additional clients. ZeroNorth, backed by AP Moller Holding and other investors, secured $20 million in February to fuel expansion and acquisitions. The company has made six strategic acquisitions and is positioning itself as a major consolidator in maritime tech. Its platform supports major shipping firms like Vitol, Hapag-Lloyd, and X-Press Feeders.