Oil Rises 2% on U.S. Inventory Drop Amid Ukraine Peace Talks

Oil prices rose about 2% on Wednesday after U.S. crude inventories fell by 6 million barrels, exceeding expectations, while investors monitored Ukraine peace talks and ongoing sanctions on Russian oil. Brent crude settled at $66.84 per barrel and WTI at $63.21, reversing earlier declines linked to optimism over a potential Russia-Ukraine deal. U.S. export growth and strong refinery demand contributed to the bullish sentiment. Meanwhile, geopolitical developments—including Russian advances in eastern Ukraine, tensions over nuclear talks with Iran, and India resuming purchases of discounted Russian oil despite U.S. tariffs—added complexity to market expectations. Other supply factors included Saudi Arabia’s June crude export drop and Norway’s stronger-than-forecast combined oil and gas production in July.

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Norway Crude Output Surges to 10-Year High on Johan Castberg Ramp-Up

Norway’s oil production hit a decade-high in July, reaching 1.96 million bpd, boosted by the ramp-up of Equinor’s Johan Castberg field. Production rose 17% from June, marking the highest monthly output since 2011. Norwegian producers continue investing heavily to maximize output from the mature continental shelf. Exports are also recovering, with July crude loadings expected to be the highest since at least 2012. Combined, the Johan Sverdrup and Johan Castberg fields produce about 1 million bpd.

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US Crude Exports Rebound Above 4m bpd on Asian Demand, Refinery Maintenance

US crude exports are rebounding after a sluggish summer, with shipments expected to exceed 4 million bpd in August and September—the highest since early 2025. The uptick is driven by preventive refinery maintenance, weaker domestic demand, and Asian buyers favoring cheaper WTI over Middle Eastern grades. Refinery outages at facilities such as TotalEnergies’ Port Arthur and Shell’s Norco have reduced Gulf of Mexico crude demand, pressuring Mars Blend prices. Meanwhile, Magellan East Houston crude remains firm due to strong export pull and inventory builds at Cushing, while Midland barrels largely track MEH. Analysts caution that while exports and MEH premiums may rise in the near term, momentum could ease if refinery demand returns and Asian demand slows.

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Tanker Fleet Shifts West as Canadian and South American Exports Surge

Mainstream aframax/LR2 tankers are increasingly operating West of Suez as global crude trade patterns evolve post-Ukraine invasion, with North and South America emerging as key growth markets. The expansion of Canada’s Trans Mountain pipeline boosted exports by 426% between 2023 and 2024, now generating about 26 aframax/LR2 loadings per month, evenly split between the U.S. and Asia. South America has added 7 extra monthly loadings, led by Argentina’s Vaca Muerta shale output, which is projected to rise by 430,000 bpd to 1.3m bpd by 2030, and Puerto Rosales handling over 100,000 bpd of Medanito crude by mid-2024. Europe continues strong aframax/LR2 activity on short-haul North Sea trades, while Central America and Asia have seen declines, with Mexico’s exports expected to drop by 630,000 bpd to 1.3m bpd by 2030. The mainstream fleet, about 405 ships, has proven highly dynamic compared to the Russian-linked “grey fleet,” which remains focused on sanctioned long-haul trades.

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India’s State Refiners Resume Russian Oil Purchases Amid US Tariff Threats

India’s state-owned refiners, including Indian Oil Corp. and Bharat Petroleum, have resumed buying Russian Urals crude despite US threats of higher tariffs and public criticism from Trump administration officials. The return to Russian imports follows a brief pause earlier in August when India was warned of potential economic penalties for continuing the trade. US officials, including Peter Navarro and Treasury Secretary Scott Bessent, accused India’s Big Oil lobby and wealthy families of profiteering from Russian oil purchases. India maintains that its crude buying decisions are market-driven and has emphasized protecting national interests amid the geopolitical pressure. The deepening discount on Urals crude, now $2.50 per barrel below Dated Brent, is seen as a strong incentive for India to continue sourcing from Russia.

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India’s Nayara Turns to Dark-Fleet Tankers and Russian Oil Amid EU Sanctions

India’s Nayara Energy is increasingly relying on “dark-fleet” tankers and Russian Urals crude to maintain operations after being hit by EU sanctions. The company’s 400,000-bpd refinery and 7% of India’s fuel stations make it a key player, prompting government intervention to approve certain sanctioned vessels for domestic cargo movement. Some of these tankers, like the Leruo and Next, are blacklisted by the EU and UK but are still operating under New Delhi’s approval. Nayara has over 1.2 million barrels of refined products on sanctioned ships idling off Vadinar and is receiving Urals cargoes via Aframax tankers such as Mars 6 and Tiger 6. Greek and other non-Russian deliveries have been delayed.

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CMB.Tech and Golden Ocean Merger Creates Maritime Giant with 251-Ship Fleet

Belgian shipowner Alexander Saverys finalized the merger of CMB.Tech and Golden Ocean, creating one of the world’s largest diversified listed maritime groups. The deal was approved with 92.72% shareholder support, resulting in 95.95m new shares issued, valued at $797m. The merged fleet now totals 251 ships worth $11.1bn, with an average age of 6.1 years and a $3bn contract backlog; more than 80 vessels are hydrogen- or ammonia-ready. The company has $400m liquidity and is now listed in Oslo, New York, and Brussels. Analysts expect possible divestments of up to 34 older/non-core ships worth $1.08bn, with a sharper focus on capesize and newcastlemax bulkers.

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Gunvor Secures $49,000/Day VLCC Charters as Spot Rates Climb 16%

Gunvor Group, via its Clearlake Shipping arm, has expanded tanker exposure by fixing the Almi Hercules and Advantage Verity on 12-month charters at $49,000 per day. This compares with a prior three-year charter signed by Trafigura at $53,500 per day but remains above current VLCC spot rates of $38,200 per day, which are up 16% in a month. Clearlake also fixed the aframax Prometheus Light at $32,500 per day and secured two LR2s (STI Rose and STI Spiga) for five years at $32,500 per day, creating a profit margin of about $3.2m in the first year versus AB Commodities’ $28,000 rate. In addition, the LR2 Navig8 Providence was chartered for $32,125 per day, while LR2 spot rates stand at $31,700, up 24% in a month. Elsewhere, ExxonMobil fixed the VLCC Olympic Trust at $40,000 per day for up to six months, and Mercuria took the VL Pioneer at $49,000 per day, underscoring a busy period in both term and spot chartering.

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Odfjell Welcomes Zero New Chemical Tanker Orders Amid Market Shift

Odfjell highlighted that zero new chemical tanker orders in Q2 was the “most positive news,” with the company holding 14% of the sector’s orderbook, including 20 tankers (two owned, 18 time-chartered). CEO Harald Fotland noted the total orderbook equals about 20% of the global fleet, meaning moderate capacity growth ahead, with declines in large chemical tankers but sharp increases in midsize stainless steel vessels. Older J19s (19,000–20,000 dwt, about 350 in service) are being phased out in favor of J25s, which are around 25% more efficient.

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South Korea’s Petrochemical Sector to Slash Naphtha-Cracking Capacity Amid Global Margin Crisis

Ten South Korean petrochemical companies have agreed to restructure operations, including cutting 2.7–3.7 million metric tons of annual naphtha-cracking capacity, equivalent to up to 25% of the country’s total, in response to government pressure. The government linked financial and regulatory support to active restructuring, aiming to restore competitiveness, reduce overcapacity, and improve corporate finances while minimizing local economic disruption. Leading companies involved include LG Chem, GS Caltex, Lotte Chemical, Hanwha TotalEnergies, S-Oil, and HD Hyundai Chemical, with some debt-laden firms like Yeochun NCC facing urgent financial pressure. Analysts noted the restructuring is necessary for survival amid a decade of overcapacity and weak global petrochemical margins, which are not expected to recover before 2027. The plan also involves consolidating industrial complexes and encouraging companies to focus on higher-value products.