Trump’s Tariff Threat Drives Oil Prices to Five-Month Low

Oil prices plunged on Friday, with Brent falling 3.8% to $62.73 and WTI dropping 4.2% to $58.90, after U.S. President Donald Trump threatened major new tariffs on China, worsening demand concerns. Analysts said the sell-off reflected a broad risk-off sentiment amid fears of weaker global trade and an already oversupplied oil market. The drop was compounded by rising production from OPEC and the Americas and a reduced geopolitical risk following a ceasefire deal between Israel and Hamas. The Gaza ceasefire shifted attention back to potential oil surpluses as OPEC+ gradually unwinds production cuts. Additional worries over a possible U.S. government shutdown further weighed on market sentiment, heightening concerns about slower demand in the world’s largest oil consumer.

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Tanker Rates Surge as China Hits U.S. Ships With $56-per-Ton Levies

The global shipping market plunged into turmoil after China announced new charges of 400 yuan ($56) per ton on U.S.-linked vessels, a move that could cost over $6.2 million per supertanker per port visit. The decision, effective October 14, mirrors Washington’s new measures on Chinese vessels and will triple by April 2028. Oil-tanker charter rates jumped the most since 2020, while freight derivatives for Middle East-to-China routes soared nearly 25% as operators scrambled to adjust to the new costs. The dispute followed U.S. sanctions on a major Chinese import terminal and prompted President Trump to threaten additional tariffs within hours of Beijing’s retaliation. Analysts warned the levies would disrupt global oil flows and hit U.S.-listed tanker companies—especially those with over 25% American ownership—as market inefficiencies drive rates even higher.

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China’s New Port Fees Threaten Major Public Shipowners With Double Impact

China’s upcoming port fees, effective October 14, could hit many public shipowners with significant U.S. investor bases, escalating tensions from the U.S.-China trade and maritime disputes. Fees apply to vessels owned, operated, flagged, or built in the U.S., and to companies with 25% or more U.S. equity, potentially affecting owners of VLCCs, capesize bulkers, and VLGCs. Analysis shows that shipowners like International Seaways, DHT Holdings, Tsakos Energy, Star Bulk, Safe Bulkers, and Dorian LPG exceed the 25% threshold and may face substantial charges, while others like Seanergy, Danaos, and Frontline fall below it. Private companies and charterers, including major commodity players like Vale, Rio Tinto, and BHP, may also be impacted due to U.S. shareholder stakes, highlighting the broad scope of the regulations. Market observers note uncertainty over exact shareholder data and enforcement, but the fees could create a “double hit” on vessel operators calling ports in both China and the U.S.

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Trump Escalates Trade War With 100% China Tariffs and Tech Export Controls

U.S. President Donald Trump announced a 100% tariff on Chinese imports and export controls on critical software, effective November 1, 2025, after accusing Beijing of launching “extraordinarily aggressive” trade measures. The move would raise total tariffs on Chinese goods to 130%, just below this year’s 145% peak, and comes days before a planned meeting with President Xi Jinping, which now faces cancellation. Markets reacted sharply — the S&P 500 dropped 2.7% and the Nasdaq 100 fell 3.5%, marking their worst day since April, while soybean futures slid 1.9% amid fears of renewed trade disruption. China has recently tightened export controls on rare earths and opened an antitrust probe into Qualcomm, while Trump’s new restrictions also target Chinese port cranes and cargo-handling equipment with tariffs up to 150%. The escalation threatens to derail fragile U.S.-China negotiations and could severely impact sectors from semiconductors to agriculture, with analysts warning the standoff shows the “fragility” of bilateral relations.

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U.S. Sanctions on Iranian Oil Hit China’s Sinopec and Key Shandong Terminal

The latest U.S. sanctions on Iranian oil exports target the Rizhao Shihua Crude Oil Terminal, through which Sinopec imports about 804,000 bpd, or 20% of its total crude intake. The terminal, half-owned by a Sinopec logistics unit and capable of handling VLCCs (2 million barrels each), is accused of receiving Iranian oil on sanctioned vessels. The measures, announced ahead of U.S.–China talks, raise tensions as they mark the fifth sanctioned terminal in Shandong, cutting off half of the province’s VLCC capacity. Analysts warn that up to 10–20% of oil imports through Rizhao come from sanctioned sources, potentially forcing Sinopec to redirect shipments to Ningbo, Qingdao, or other ports to maintain supplies to major refineries like Luoyang and Yangzi, which together process 420,000 bpd. Spot freight rates for the Middle East–China route rose 3% on fears of congestion and discharge delays.

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Saudi Oil Exports to China Set to Drop in November as Refiners Turn to Cheaper Spot Cargoes

Saudi Arabia’s crude exports to China are expected to fall to around 40 million barrels in November, down from 51 million barrels in October, as Chinese refiners shift to lower-priced spot crude from other Middle East suppliers. Despite market expectations, Saudi Aramco kept its Arab Light official selling price unchanged for November after OPEC+ agreed to a modest output hike. Meanwhile, Dubai and Oman crude benchmarks have dropped by over $1 per barrel from last month, making spot cargoes more appealing. OPEC+ plans to raise collective production by 137,000 barrels per day in November, mirroring October’s increase amid concerns over potential oversupply. The reduced Saudi shipments highlight intensifying competition among Middle Eastern exporters for Chinese market share.

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India Boosts Russian Oil Imports Amid Rising Global Supply

India increased its imports of Russian crude to 55.9 million barrels in September, up 17% month-on-month, taking advantage of wider discounts for Urals crude. Early October data indicate seaborne arrivals near 2 million bpd, nearly double September’s early-month levels. Despite U.S. tariffs totaling 50% on Indian imports, New Delhi has continued to prioritize national interest, while also increasing its purchases of U.S. crude from 166,000 bpd in July to 518,000 bpd in September. Global Russian exports rose from 5.1 million bpd in July to 5.5 million bpd in September, with China remaining the top buyer and Russia’s production nearing its OPEC+ quota of 9.4 million bpd. The surge in global output, including Saudi Arabia at 9.8 million bpd and U.S. production at a record 13.5 million bpd, is creating strong tanker demand for the fourth quarter.

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U.S. Warns Sanctions on Shipping Interests if IMO Approves Carbon Tax

The United States has intensified its opposition to the IMO’s proposed global carbon tax for shipping, warning of sanctions against ships, seafarers, flags, and officials from countries supporting the measure. The Trump administration outlined potential actions including port fees, commercial restrictions, visa limitations, and even blocking vessels from U.S. ports. Cabinet members Rubio, Wright, and Duffy emphasized that these measures would target countries backing the Net Zero Framework, primarily European nations. The threats represent a significant escalation just days before IMO member states vote between 14–17 October on formal adoption of the framework. The U.S. framed its stance as protecting economic interests against what it called a “European-led neo-colonial export of global climate regulations.”

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EU Stands Firm Behind IMO Net-Zero Framework Despite U.S. Threats

The European Union reaffirmed its support for the IMO’s global carbon tax plan for shipping, ignoring U.S. threats to penalize countries and operators backing the measure. The EU highlighted that its own Emissions Trading System (ETS) and FuelEU Maritime rules include review clauses to align with future IMO policies. Meanwhile, Greece, the world’s largest ship-owning nation, voiced objections over “ambiguous and unrealistic targets” and warned the regulation could cost the industry €200–300 billion by 2035, potentially favoring heavy fuel oil over LNG. Despite dissent from some EU members like Cyprus and Malta, the bloc is likely to maintain a unified stance if the IMO vote proceeds this week. Analysts note that U.S. opposition could test EU cohesion, but Brussels appears committed to ensuring a global decarbonization standard for shipping.