Oil Prices Fall to 5-Month Lows as Trump-Putin Summit Plans Stir Market Uncertainty

Oil prices fell over 1% on Thursday, with Brent at $61.06 and WTI at $57.46, their lowest since May. The drop followed President Donald Trump’s announcement of a planned Budapest summit with Vladimir Putin to discuss ending the Ukraine war, raising uncertainty over global energy supply. A U.S. crude inventory build of 3.5 million barrels to 423.8 million and record production at 13.636 million bpd also weighed on sentiment. Trump said India’s Prime Minister Modi vowed to stop buying Russian oil, potentially disrupting trade flows since Russia supplies about one-third of India’s crude. Additionally, the UK sanctioned Russian oil majors Rosneft and Lukoil, adding further pressure to the market.

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India Plans Gradual Reduction of Russian Oil Imports Amid Trump Confusion

India’s refiners expect to trim, not halt, Russian crude purchases, following President Trump’s claim that Prime Minister Modi pledged to stop imports entirely, though India has not confirmed the conversation. Companies representing over 80% of India’s refining capacity said they were caught off guard and are awaiting government guidance. Russian crude currently accounts for about one-third of India’s imports, with flows in October estimated at 1.7 million bpd—roughly 6% higher than September. Indian refiners continue to prioritize energy security and cost-effective sourcing, with no recent surge in non-Russian crude buying. Trump acknowledged that any reduction “would not happen immediately”, leaving timelines and enforcement uncertain.

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Russia’s Urals Crude Falls Below EU Price Cap Amid Weak Brent and Higher Freight Costs

Russia’s Urals crude at Baltic ports dropped to $47.40 per barrel on Wednesday, falling below the EU’s $47.60 price cap for the first time, as Brent prices hit a five-month low and freight costs to Asia climbed. The EU’s moving price cap, set at 15% below the global market average, replaced the earlier $60 G7 limit imposed in December 2022. While the U.S. continues to follow the $60 cap, the EU’s enforcement power remains limited since most oil trade and payments are dollar-based and cleared through U.S. banks. The EU’s measure bans insurance and shipping services for Russian crude sold above the cap. However, analysts note that a brief dip below the threshold won’t automatically ease restrictions, as cargo prices are averaged over several days and could rebound with Brent.

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Canadian Oil Exports to China Set for Record Amid US-China Trade Tensions

Canadian crude shipments to China are on track for a record month, with almost 5 million barrels exported from Vancouver in the first 15 days of October, driven by China’s pivot away from US crude. Over 70% of oil-laden vessels from Vancouver are headed to Chinese ports such as Ningbo, Zhoushan, and Zhanjiang, with the Zhejiang Petroleum & Chemical refinery receiving the largest share. The surge is fueled by steep discounts on Russian and Iranian oil and rising freight costs for US-linked crude due to Chinese retaliatory port fees. Western Canadian Select traded at $10.20 below WTI, while Asian demand has lifted Canadian heavy crude prices to their strongest since July. This trend marks the first time Vancouver crude is trading at a premium to barrels piped to Texas since at least September 2024.

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Baltic Exchange Launches New Aframax Benchmarks Amid Canada-Asia Crude Surge

The Baltic Exchange has introduced two new aframax route assessments, TD28 (Vancouver to Ningbo, China) and TD29 (Vancouver to Pacific Area Lightering off the US West Coast), in response to rising Canadian crude exports and geopolitical shifts. The new benchmarks reflect changes driven by the Trans Mountain Expansion (TMX), which boosted Canada’s pipeline capacity from 300,000 bpd to 890,000 bpd, allowing Vancouver’s Westridge Marine Terminal to handle up to 34 aframax calls monthly. These routes have become strategically important due to US-China trade tensions, Western sanctions on Russian energy, and growing Asian demand for diversified supply. Aframax vessels now carry Canadian crude either directly to China or lightered onto larger tankers off California, as fully-laden VLCCs cannot load at Vancouver. The Baltic confirmed the benchmarks underwent extensive trials and consultation to ensure liquidity, panel participation, and commercial relevance, providing transparent freight pricing amid evolving global energy flows.

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Nigeria’s Dangote Refinery to Resume Gasoline Production After Outage Boosted Global Prices

Nigeria’s Dangote oil refinery has started restarting its 204,000 bpd gasoline unit (RFCCU) and aims to resume output by Sunday, according to IIR. The unit had been offline since late August, tightening fuel supply across the Atlantic basin and driving up gasoline prices. Morgan Stanley noted the outage lifted European gasoline cracks above $20 per barrel in early September despite weak seasonal demand. In response to the shortage, EU and UK gasoline exports to West Africa rose to 221,000 bpd in September, the highest since May. The refinery’s return is expected to ease pressure on global gasoline markets.

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Antwerp Port Congestion Disrupts Oil Deliveries Despite Suspension of Pilots’ Strike

Oil deliveries at the Port of Antwerp-Bruges are being disrupted by severe congestion following a harbour pilots’ strike over pension reforms, with 188 vessels still waiting to berth or depart. Although pilots have suspended strike action until October 24, a go-slow protest continues to hinder traffic recovery. As of Wednesday, the port was operating at about 70% capacity, further impacted by a national strike earlier in the week. 128 ships were waiting to enter and 60 to leave the port, while towage, locks, and bridges remained functional. The backlog is expected to take several days to clear, though Zeebrugge, part of the same port complex, has seen only limited disruption.

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Suezmax Rates Rise as VLCC Rally Could Boost Smaller Tanker Earnings

Suezmax time-charter rates climbed to a year-to-date high of $64,831 per day, up $1,582, continuing a three-day rally. The gains are supported by rising Brazilian and Caspian exports and VLCC loading restrictions in Guyana, though VLCCs themselves may drive further upside if their earnings remain strong. VLCC rates surged 50% last week to $84,800 per day, with top-quality vessels earning up to $98,900 per day, boosted by US sanctions and Chinese port fees. Aframax tankers also advanced, reaching $39,700 per day, up from $36,623 at the start of October. Analysts suggest that higher VLCC earnings and ongoing OPEC-driven supply flows could continue to lift rates across the smaller tanker segments.

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Chinese Port Fees Boost Sellers’ Market for Secondhand Tankers

New Chinese port fees on US-linked vessels are causing disruptions and delays, fueling a strong sellers’ market in the secondhand tanker sector, brokers say. Modern vessels, including eco and scrubber-fitted units, are scarce, leading to firm pricing and rising premiums across VLCC, aframax/LR2, and product tanker segments. Greek broker Allied QuantumSea noted the market is controlled and measured, keeping competition high among buyers, while volatility from Chinese fees sent a brief uptick in freight rates. Recent deals include Greece’s Performance Shipping buying two 2019-built suezmaxes at $75.5m each, and a 2007-built MR1 product tanker sold at $13.5m. Brokers expect the market to remain bullish as Q4 progresses due to limited modern tonnage and strong freight support.

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HMM Orders $2.82bn Fleet Expansion with 12 LNG Container Ships and 2 VLCCs

South Korea’s HMM has confirmed a KRW 4 trillion ($2.82bn) order for 12 LNG dual-fuelled 13,000-teu container ships and two VLCCs, marking a major fleet expansion. The boxships will be built by HD Hyundai Heavy Industries (8 vessels) and Hanwha Ocean (4 vessels), all scheduled for delivery by April 2029, supporting HMM’s decarbonization and sustainable shipping strategy. The two new VLCCs will diversify the company’s bulk fleet, which already includes 11 VLCCs in a 107-vessel fleet. HMM’s broader investment plan includes up to $13.5bn by 2030 for new vessels, terminal upgrades, and container acquisitions, while feeder ships of 1,800-2,700 teu are also under consideration from Chinese yards. Per-vessel costs are estimated at $180-185m for 13,000-teu ships and $30-45m for feeder vessels, reflecting advanced specifications and early delivery requirements.

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Bahri Extends 10-Year VLCC Contract with South Korea’s S-Oil

Saudi shipowner Bahri has renewed a 10-year contract of affreightment (COA) with South Korean refiner S-Oil, ensuring its VLCCs continue transporting crude from the Middle East Gulf and Red Sea to Onsan. The deal could utilize up to 10% of Bahri’s 50-ship VLCC fleet, providing predictable revenue and protecting part of the fleet from market volatility. Bahri CEO Ahmed Ali Al-Subaey highlighted the 20-year partnership between the two companies and emphasized the agreement’s role in enhancing fleet utilization and trade corridor coverage. The renewal comes amid Bahri’s fleet expansion, which aims to improve margins despite a 44% drop in Q2 net profit to SAR 407.5m ($108.6m) and lower first-half earnings of SAR 940.3m. Separately, Bahri Chemicals secured a first-time COA with Luberef to transport base oils across the Middle East Gulf and India, marking a strategic growth initiative.

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Norway Upholds IMO Net-Zero Plan Amid US Pressure

Norway has affirmed its support for the IMO Net-Zero Framework, despite US threats of economic retaliation, including port fees and visa restrictions for seafarers. Minister Andreas Bjelland Eriksen stressed that these pressures will not change Norway’s position, highlighting concern for safeguarding officials but maintaining commitment to negotiations. The IMO member states are set to vote on the framework, which aims to achieve net-zero emissions by 2050 in the shipping sector. Bjelland Eriksen called the initiative “groundbreaking” for international coordination and potential inspiration for other climate sectors. The Norwegian Shipowners’ Association also backs the plan, noting Norway’s maritime industry is already advanced in emission reductions, giving it a competitive advantage.