Oil Gains $1 as Kurdish Export Restart Faces Delays

Oil prices rose over $1 a barrel on Tuesday after efforts to resume exports from Iraq's Kurdistan region stalled, easing concerns about a potential global oversupply. Brent crude settled at $67.63 a barrel, up $1.06, while WTI rose $1.13 to $63.41 a barrel. Pipeline exports of around 230,000 bpd from Kurdistan to Turkey remain blocked due to debt repayment guarantee issues among key producers. Despite rising supply from OPEC+ and other non-member sources, supportive factors such as low OECD oil inventories and recent U.S. crude stock draws helped underpin prices. Traders are also watching potential EU sanctions on Russian oil and geopolitical tensions in the Middle East, while Ukraine’s attacks on Russian oil facilities highlight ongoing supply risks.

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Primorsk Oil Port Faces Loading Delays After Ukrainian Drone Strikes

Russia’s Primorsk port continues to load crude oil two to three days behind schedule following Ukrainian drone strikes on September 12 that damaged two Aframax vessels and parts of port infrastructure. The affected ships, Kusto and Cai Yun, remain anchored near the port, while other vessels are being processed several days late. For example, the Oman-flagged Aframax Jasmine, carrying 100,000 metric tons of Urals oil to China, departed three days later than planned. These delays may reduce Primorsk’s oil exports for September, initially planned at around 900,000 bpd. Russian authorities have reshuffled exports from western ports to compensate, but ongoing drone attacks could prompt further adjustments in oil transportation.

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Exxon Signs Preliminary Agreement with Rosneft to Explore Recovery of Russian Losses

Exxon Mobil has signed a non-binding initial agreement with Russia’s Rosneft to explore ways to recoup a $4.6 billion writedown on its Sakhalin-1 project following the 2022 invasion of Ukraine. The talks, ongoing since 2023, are contingent on progress toward a peace deal in Ukraine and potential easing of U.S. and EU sanctions. Exxon lost access to 150 million barrels of proven reserves in Russia when it exited the country, joining other Western firms like BP and Shell in writing down Russian assets. The agreement sets the framework for discussions but is not legally binding, with no immediate commercial activity expected. Russian officials and Sakhalin authorities have expressed support for Exxon’s potential return, highlighting the project’s strategic importance.

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Exxon Mobil Starts Singapore Refinery Unit, Lifts Sour Crude Imports

Exxon Mobil has started production at a new unit in its Singapore refinery to produce lube base stocks from residual fuel, expanding Group-II base stock capacity by 20,000 barrels per day. The technology converts bottom-of-the-barrel crude products into higher-value base stocks and distillates, boosting refinery output for commercial and industrial lubricants. Crude imports at the Singapore plant reached a record 541,000 bpd in August, driven by high-sulphur grades and halting low-sulphur U.S. crude purchases since April. The UAE supplied Murban and Upper Zakum crude, Qatar provided al-Shaheen, and Saudi Arabia’s Arab Light crude returned to imports for the first time since November 2023. Exxon's Jurong Island refinery now favors sour crude from multiple Middle Eastern suppliers to feed the new unit’s processing requirements.

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Norway’s Oil and Gas Output Surpasses Forecast in August

Norway’s oil and gas production in August exceeded official forecasts by 2.6%, the Norwegian Offshore Directorate reported. Total output of oil, condensate, natural gas liquids, and gas reached 0.670 million standard cubic meters per day, or 4.21 million barrels of oil equivalent, up 0.4% year-on-year. Crude oil production rose to 1.92 million bpd, above the forecast of 1.80 million bpd and last year’s 1.78 million bpd. Natural gas output fell slightly to 332 million cubic meters per day from 349 million cubic meters a year earlier, but still beat the projected 328.3 million cubic meters. Production levels vary month-to-month due to maintenance and stoppages across Norway’s nearly 100 offshore fields.

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Chevron’s Venezuelan Oil Exports Halved Under New U.S. Rules

Chevron can now export only about half of the crude produced in its Venezuelan joint ventures under the latest U.S. Treasury authorization. The July permit allows operations and exports to the U.S. but prohibits cash payments to Maduro’s government, requiring in-kind royalty and tax payments instead. As a result, PDVSA controls a portion of the crude for domestic refining or export, reducing the volume available to Chevron for shipment to the U.S. Gulf Coast. The new rules differ from a 2022 license that permitted full exports and cash payments, slowing repayment of Venezuela’s outstanding debt to Chevron. Despite these limits, Chevron resumed exports in August, shipping around 60,000 bpd, with September averaging 102,000 bpd.

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US Sanctions Force Insurance Termination for Houthi-Linked Tankers

Four tankers — the Star MM (47,200 dwt, built 1999), Nobel M (42,600 dwt, 2002), Black Rock (12,200 dwt, 1998), and Shria (30,000 dwt, 1999) — lost their mainstream insurance after being blacklisted by the US Treasury on 11 September. The vessels were linked to Yemeni businessman Muhammad Al-Sunaydar, accused of supplying fuel to Houthi-controlled ports and tied to Dubai-based Tyba Ship Management, which was also sanctioned. West of England, their P&I insurer, confirmed cancellation of coverage, including blue cards and Maritime Labour Convention certificates, in compliance with sanctions policy. Tracking data shows the ships had previously made laden calls at Ras Isa Bay but ceased visits after April 2020 sanctions on Houthi fuel imports. The move marks the largest sanctions package yet targeting the Houthis and underscores stricter enforcement against shipping tied to sanctioned networks.

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Canadian First Nations Push for Majority Ownership in Proposed Alberta-to-BC Oil Pipeline

A coalition of 31 First Nations, organized by the National Coalition of Chiefs, is planning to propose a new oil pipeline from Alberta to northern British Columbia, aiming for up to 51% indigenous ownership. The initiative, dubbed Northern Gateway 2.0, follows the cancellation of the original Northern Gateway project under Prime Minister Justin Trudeau. Indigenous leaders hope majority control of the pipeline board will allow them to ensure environmental protections. Alberta Premier Danielle Smith and federal officials, including Mark Carney, have signaled support, although regulatory hurdles such as the BC northern coast tanker ban remain a challenge. Enbridge, which operated the original Northern Gateway, prioritizes expanding pipelines to the US first, while the government is exploring regulatory changes to fast-track large infrastructure projects.

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Charterers Face Higher Term Rates as VLCC Spot Market Heats Up

Term tanker charter rates are climbing as VLCC spot earnings surge to nearly $100,000 per day on strong Middle East Gulf demand. Brokers report owners are keeping more tonnage in the spot market while charterers pay firmer rates for longer periods, particularly in the aframax and dirty LR2 segments. Recent deals include Adnoc’s VLCC Hili fixed to Vitol for two years at $51,000 per day, Asyad’s As Suwayq taken by TotalEnergies at $47,500 for up to six months, and Ray Car Carriers’ Sea Lion fixed by Trafigura at $51,000. Suezmax activity is also rising, with Chevron and Equinor extending charters at around $40,000 per day. While strong VLCC spot rates have not yet fully translated into longer-term contracts, brokers note renewed charterer confidence ahead of the traditionally strong fourth quarter, supported by expectations of higher Opec output.

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John Fredriksen Expands Private Fleet with Four New VLCC Orders in China

Norwegian shipping magnate John Fredriksen has ordered four 306,000-dwt VLCCs from Hengli Heavy Industries through his private Seatankers group, raising his VLCC tally at the yard to six, worth about $702m. This follows earlier reports that two firm orders and two options were placed at $118m apiece. Fredriksen now has 14 VLCCs under construction privately, representing $1.66bn in investments, in addition to six suezmaxes and eight VLCCs being built at Dalian Shipbuilding in China. Many of Hengli’s VLCCs are believed to be resales, with four to five vessels due for delivery in 2026, while Hengli’s parent company has also booked ships to sell or employ in its petrochemical business. The deal underscores Hengli’s growing role in the tanker sector, after previously approaching Frontline with similar offers that fell through due to pricing.

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VLCC Market Surge Signals Start of New Upcycle as Rates Hit Five-Year Highs

The VLCC spot market has surged dramatically, with daily rates jumping 94% from $45,155 on 1 September to $87,532 in just over two weeks, marking the strongest rally since the pandemic storage boom of 2020. Xclusiv Shipbrokers described the move as a “regime change,” with rates now more than double the 2025 year-to-date average of $41,500 and five times the five-year average. Clarksons currently values VLCC resales at $148m, while five-year-old units are priced at $118m, up $4m this year. The rally is supported by strong Middle East Gulf fixing, longer Atlantic-to-Pacific voyages, Opec+ output increases, and the potential return of floating storage as inventories build. Analysts expect tightened secondhand price negotiations as modern tonnage attracts strong demand in what looks like the start of a delayed VLCC upcycle.