Oil prices rise as Russia-Ukraine war threatens supply disruption

On Monday, oil prices rose 2% due to expectations of more U.S. sanctions on Russian oil and Ukrainian attacks on Russian energy infrastructure. Brent crude settled at $68.80 and West Texas Intermediate at $64.80. The U.S. is trying to broker a peace deal between Ukraine and Russia to end the 3-1/2-year war. President Trump threatened sanctions on Russia if peace talks stall. Vice President Vance said Russia made concessions for a settlement. Ukraine launched drone attacks causing fires at Russian fuel terminals. The market impact of Russian disruptions was offset by OPEC+'s production increases. Eight oil exporters will meet on September 7. Federal Reserve Chair Powell hinted at an interest rate cut in September, boosting investor risk appetite. However, oil benchmarks lack momentum due to concerns of economic growth limiting fuel demand due to Trump's tariffs.

___________________________________

India's crude oil imports drop to near 18-month low in July

India's crude oil imports decreased by 8.7% in July to 18.56 million metric tons, the lowest level since February 2024. This is significant as India is the world's third-largest oil importer and consumer, making this data crucial for understanding the country's oil demand. On a yearly basis, crude oil imports dropped by 4.3% compared to July 2024, while crude oil product imports decreased by 12.8% and exports by 2.1%. India's fuel consumption in July also declined by 4.3% to 19.43 million tons. The country is facing additional U.S. tariffs of up to 50% effective August 27, with Washington already imposing 25% duties on Indian shipments. This is in part due to India's purchase of Russian oil, with state-run refiners resuming purchases and Nayara Energy relying on a dark fleet to import oil and transport refined fuels amidst European Union sanctions. Trade Minister Piyush Goyal has stated that India will approach its future trade relationship with the United States with an open mind.

___________________________________

Russian oil refineries, terminals burn as Ukraine hits Putin's war economy

Ukraine has increased drone attacks on Russian oil refineries and export infrastructure in response to Russian advances on the front lines. This has disrupted Moscow's oil processing and exports, leading to gasoline shortages in some areas. The attacks aim to raise the stakes in potential peace talks and challenge the perception that Ukraine is losing the war. These attacks have impacted 17% of Russia's refinery capacity, pushing more crude towards exports at a time when the US is urging China and India to reduce purchases of Russian oil. The affected refineries are facing challenges in supplying domestic fuel, impacting Russia's budget as oil and gas exports make up a quarter of its revenues. Despite Western sanctions, Moscow continues to produce record numbers of weapons. The conflict in Ukraine has evolved into an economic battle, with both sides using drones and missiles to target key infrastructure. Russia's economy has managed to withstand the sanctions, but concerns are growing as growth slows. Ukraine has attacked several Russian plants, causing significant damage and highlighting the economic impact of the ongoing conflict.

___________________________________

Tanker sale-and-purchase activity set to snap three-year downward trend

Shipowners have spent nearly $9 billion on tankers this year, taking advantage of lower prices in the market. Although the sale-and-purchase market for tankers has slowed down recently, deal volumes are still higher compared to the previous year. The annualized 2025 run rate for tanker sales is up by 14%, showing a reversal from three years of declining sales. So far in 2025, 262 tankers totaling 28.5 million deadweight tons have been sold, with a total investment value of $8.6 billion. Total tanker sales reached a multi-decade high in 2022, but have since decreased in the following years. Despite the overall decline in spending, dark fleet buyers are expected to increase activity due to a lower price cap on Russian crude oil starting in September. This change may require more vessels to handle Russian cargoes, leading to more transactions in the market.

___________________________________

Fewer VLCCs available in the Middle East as busier market pushes rates up 25%

According to analysts and brokers, there are fewer available VLCCs in the Middle East, leading to optimism for rate increases. Earnings for modern vessels have risen to $57,000 per day, with tighter tanker supply due to strong chartering activity. Ship lists are shorter than the 2024 average, with just 27 vessels available in the Middle East compared to 41 on average. The US Gulf also saw an increase in rates, with expectations of a continued firm trend. Tanker company stocks have risen as spot rates increase. Saudi Arabia's higher crude exports could support rates towards $63,000 per day, with rising Atlantic production providing additional demand for VLCCs. Brent crude is at a discount against Dubai, widening the West-to-East arbitrage and encouraging more VLCC flows to Asia. Overall, there is optimism in the market for rate increases and strong demand for VLCCs in the near future.