Price decline
OPEC+ countries
Brent futures curve
Oil supply
Kazakhstan
tariff war
Price target
Link: https://shorturl.at/asfT7
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105Price decline
OPEC+ countries
Brent futures curve
Oil supply
Kazakhstan
tariff war
Price target
Link: https://shorturl.at/asfT7
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Reliance Industries, Apollo Global Management and Lone Star Funds are interested in BP's Castrol lubricants business, which has been put up for sale, according to an agency report.
Bloomberg reports, citing unnamed sources, that the first indicative bids are expected in a few weeks. Saudi Arabia's Aramco is likely to consider a bid. The lubricants business could fetch 8 to 10 billion US dollars. According to the report, BP has already sent information about the business to other potential bidders such as Brookfield Asset Management and Stonepeak Partners.
Representatives for BP, Apollo, Lone Star, Brookfield and Stonepeak declined to comment, while a representative for Reliance did not immediately respond to a request for comment, according to Bloomberg.
BP shares ultimately traded 0.46 percent lower at 4.25 euros in London trading. Reliance shares fell by 1.43 percent to 291.32 US dollars in NYSE trading on Thursday.
DJG/DJN/brb/cln
After many years of holding BP shares, I finally sold them. $BP. (+0.43%) share.
Lack of perspective, hardly any growth despite annual share buybacks and dividend increases.
Deathblow that meanwhile competition like Shell $SHEL (+0.76%) and Total Energies $TTE (+0.49%) want to buy up or take over.
I have taken good dividends over the years and am out with a plus.
In the end, I invested the proceeds in the competitor Shell $SHEL (+0.76%)
and in the refrigeration and air conditioning technology of Carrier Global $CARR (+0.25%) refrigeration and air conditioning technology.
I will miss the high dividend (my personal dividend yield has now reached 8%)
But Carrier and Shell are growing very strongly and if Shell were to take over BP after all, the money would end up back there âđ»đ
Mid-May 2025 finds the tanker market battling turbulent seas. Very Large Crude Carriers (VLCCs) soften after a bank holiday slowdown, Suezmax grapples with Atlantic oversupply, Aframax maintains resilience, and Clean markets show mixed fortunes with LR2/LR1 weakening and MR stabilizing. U.S. sanctions on Iranian oil, a Houthi ceasefire, and OPEC+ production hikes shape the horizon, while Russian-Chinese crude blends and U.S.-India flows offer opportunities. This sector is a tanker weathering global stormsâletâs chart its course.
⏠VLCC Market: Softening Under Pressure
Rate Declines
VLCCs, the behemoths of crude transport, face a softening market after a brief rally. The Baltic Exchangeâs TD3C (270,000 mt Middle East Gulf-to-China) rate drops 6.5 points to WS59.55, yielding a round-trip time-charter equivalent (TCE) of $41,547 per day, down $8,000 from last week. West Africa-to-China (TD15) falls 4 points to WS61.69 ($44,561 per day), and U.S. Gulf-to-China (TD22) declines $186,533 to $8.66 million ($48,578 per day). Clarksonsâ fleet-weighted average dips to $50,583 per day, cooling from mid-Aprilâs $59,700 peak. A bank holiday and quiet Middle East Gulf (MEG) fixtures push TD3C to the low WS60s, with charterers leveraging a growing tonnage listâVLCCs navigate a cautious descent.
Cargo Dynamics
Chinaâs crude imports (11 million bpd in April) sustain VLCC demand, driven by Iranian (1.71 million bpd) and Russian cargoes, but new U.S. sanctions target four VLCCs delivering Iranian oil to China, risking disruptions. Two VLCCs (310,000-dwt and 303,100-dwt) discharge Russian-Chinese crude blends in Venezuela, spoofing AIS to mask destinations. U.S. crude flows to India surge to 470,000 bpd in June, the highest since August 2023, fueled by WTI discounts and tariff delays. OPEC+âs June production hike (411,000 bpd, led by Saudi Arabia) adds four to five VLCCs, but third-decade MEG fixtures remain slow (8 million barrels covered)âVLCCs balance opportunity with sanctions risks.
Global Forces
U.S.-China trade talks (May 11) and potential tariff exemptions (e.g., for energy) create uncertainty, with VLCC asset values holding firm (five-year-old 320,000-dwt at $109.21 million). A Houthi ceasefire may reopen the Red Sea, reducing tonne-miles but boosting short-haul volumes. UK sanctions target 100 shadow fleet tankers (worth $24 billion in 2024), impacting Russian crude flows. Red Sea rerouting persists, supporting TCEs, but low fleet growth (2.4% in 2026) and OPEC+ hikes signal upside. Clarksons notes rising inventories could lift rates in a contango marketâVLCCs sail with guarded optimism.
For illustrative purposes only
âł Suezmax Market: Atlantic Oversupply
Rate Weakness
Suezmax vessels, vital for West African and Black Sea crude, face mounting pressure. The Balticâs TD20 (130,000 mt Nigeria-to-UK Continent) drops nearly 10 points to WS89.44, yielding a TCE of $37,051 per day. Guyana-to-UK Continent (TD27) falls 13 points to WS88.33 ($36,042 per day), and CPC-to-Augusta (TD6) collapses 21 points to WS109.15 ($44,500 per day) as CPC charterers use owned tonnage. Middle East-to-Mediterranean (TD23) slips to just below WS90. Rates hit $58,821 per day in April but soften to $52,954 by May 5, with U.S. Gulf replacements at WS85 signaling further declinesâSuezmax struggles in an oversupplied Atlantic.
Regional Trends
West Africa sees weak enquiry, with 20+ Suezmax vessels available and 15 options within a five-day window, pushing TD20 toward WS90. U.S. Gulf softness (replacements at 145x85) and transatlantic activity (six options absorbed) limit upside. Black Sea TD6 weakens as CPC demand drops, with only eight third-decade stems remaining. Chinaâs Kazakhstan CPC crude imports (240,000 bpd) and Norwayâs Johan Castberg field (135,000 bpd) support rates, but West African barrel sales lag, requiring prompt fixtures. East of Suez markets appear overtonnaged, with ballasters heading to the Cape of Good Hope despite TD20âs declineâSuezmax seeks new demand sources.
External Pressures
U.S. port fees exempt sub-80,000 dwt Suezmax units, and energy tariff exemptions (except LNG) reduce disruptions, per Tormâs CEO. Houthi ceasefire talks could normalize Red Sea routes, offsetting tonne-mile gains with short-haul volumes. U.S. sanctions on Iranian oil and UKâs shadow fleet blacklist (400+ vessels) increase risks. Kazakhstanâs 1.7 million bpd output sustains CPC exports, but OPEC+ cuts (down 160,000 bpd in April) temper volumes. Clarksons forecasts 2.4% crude fleet growth in 2026, outpacing 0.5% demand, signaling rate pressureâSuezmax navigates a challenging outlook.
Trump announces the ceasefire during a meeting at the Oval office May 6, 2025
â±ïž Aframax Market: Resilient but Tested
Rate Stability
Aframax vessels, versatile crude carriers, hold steady amid softening trends. The Balticâs TD7 (80,000 mt Cross-UK Continent) drops 7 points to WS125 ($39,100 per day, Hound Point-to-Wilhelmshaven). Cross-Mediterranean (TD19) falls 20 points to WS155 ($43,500 per day, Ceyhan-to-Lavera). Atlantic routes weaken, with East Coast Mexico/U.S. Gulf (TD26) and Covenas/U.S. Gulf (TD9) tumbling 28 points to WS140 ($29,100 and $28,800 per day). U.S. Gulf-to-UK Continent (TD25) remains at WS149-150 ($36,300 per day). Rates hit $51,450 per day in April but fall to $40,260 by May 5, yet strategic repositioning sustains resilienceâAframax balances stability with pressure.
Market Dynamics
North Sea rates weaken with growing tonnage lists, though second-decade stems offer activity. Mediterranean markets soften as Libyan and Ceyhan dates advance, with prompt tonnage oversupply. U.S. Gulf sees Aframax rates drop to 145x72.5, with no Suezmax spillover and weak Nigerian crude sales. Two Aframax vessels face U.S. sanctions for Iranian oil transfers, risking availability. Norwayâs Johan Castberg (135,000 bpd) and Kazakhstanâs CPC crude support rates, but Atlantic oversupply caps gains. Signal Groupâs repositioning to U.S. Gulf/Central Europe achieves $60,700 per day for May (27% fixed)âAframax holds firm, eyeing new cargoes.
Broader Forces
U.S. port fee exemptions benefit sub-80,000 dwt Aframax vessels, and tariff exemptions for energy minimize disruptions. Houthi ceasefire talks may reduce Red Sea rerouting, but short-haul volumes could offset losses. U.S. and UK sanctions (e.g., 100 shadow fleet tankers) deter operators, while Red Sea disruptions boost tonne-miles. Clarksonsâ 2026 forecast (2.4% crude fleet growth, 0.5% demand) signals rate pressure, but Johan Castbergâs 220,000 bpd by Q2 and U.S.-India crude flows (470,000 bpd) offer upsideâAframax navigates with cautious confidence.
Britain Friday sanctioned 100 Russian shadow fleet oil tankers oil tankers that carried more than $24 billion in cargo since the beginning of 2024.
âžïž Clean Market: Mixed Performance
Rate Divergence
Clean tanker markets reflect regional splits. LR2 rates weaken, with TC1 (75kt MEG/Japan) dipping from WS123.33 to WS110.56 and TC20 (90kt MEG/UK-Continent) losing $231,250 to $3.25 million. LR1 rates stabilize, with TC5 (55kt MEG/Japan) holding at low WS130s and TC8 (65kt MEG/UK-Continent) at $2.7 million, but UK-Continent TC16 (60kt ARA/West Africa) falls 7.5 points to WS120. MR rates soften slightly, with TC17 (35kt MEG/East Africa) at WS210, TC2 (37kt ARA/U.S. Atlantic) down 6.88 points to WS126.56 ($12,044 per day), and TC19 (37kt ARA/West Africa) at WS146.88. Handymax weakens, with TC6 (30kt Cross-Mediterranean) at WS130.28 and TC23 (30kt Cross-UK-Continent) down 13.61 points to WS133.33âClean markets navigate uneven currents.
Trade Patterns
MEG LR2/LR1 markets soften due to weak enquiry, though Asian tonnage lists tighten. UK-Continent LR1s and MRs face cancellations, lengthening tonnage lists. U.S. Gulf MRs stabilize with late-week demand, but TC14 (38kt/UK-Continent) falls to WS111.07 and TC21 (38kt/Caribbean) drops to $535,714. A 50,000-dwt MR delivers Qatarâs GTL diesel (35,000 tonnes) to the U.S. Gulf, capitalizing on tightening diesel inventories (down 2.4 million barrels). Refinery margins climb post-OPEC+ news, supporting cargo flows after maintenance. Mediterranean and U.S. Gulf MR markets benefit from repositioning, but Handymax lagsâClean tankers seek balance.
Influencing Factors
U.S. port fees minimally impact MR/Handymax (sub-55,000 dwt), and Torm notes no tariff disruptions for clean products (energy exempt). Houthi ceasefire talks could normalize Red Sea routes, but Tormâs CEO sees neutral rate impacts due to short-haul volume growth. Clarksons forecasts 6.3% clean fleet growth in 2026 with flat demand, pressuring rates. Rising refinery margins and U.S. diesel demand boost MR, while Qatarâs GTL trade signals arbitrage. U.S. sanctions on Iranian oil and Chinese terminals risk disruptionsâClean markets balance opportunity with oversupply risks.
For illustrative purposes only
đ Whatâs Moving It: Oil Flows and Sanctions
Commodity Shifts
U.S. crude to India (470,000 bpd in June) and Chinaâs 11 million bpd imports drive VLCC demand, though Iranian sanctions disrupt flows. Russian-Chinese crude blends to Venezuela (1.2 million barrels) and Kazakhstanâs CPC crude (240,000 bpd) support Suezmax/Aframax. Norwayâs Johan Castberg (135,000 bpd) adds cargoes, while OPEC+âs June hike (411,000 bpd) lifts crude sentiment. Clean markets benefit from Qatarâs GTL diesel and rising refinery margins post-maintenance, supporting MR. Falling crude prices and tightening U.S. diesel inventories fuel clean tradesâoil flows shape tanker dynamics.
Policy Pressures
U.S. sanctions target six tankers (four VLCCs, two Aframax) and Chinese terminals for Iranian oil, risking VLCC/Aframax availability. UKâs shadow fleet sanctions (100 tankers, $24 billion) and Houthi ceasefire talks could normalize Red Sea routes, reducing tonne-miles but boosting short-haul volumes. U.S.-China trade talks (May 11) and energy tariff exemptions create uncertainty. Clarksonsâ 2026 forecast (2.4% crude, 6.3% clean fleet growth) signals rate pressure, but OPEC+ hikes and new fields (e.g., Johan Castberg) offer upsideâsanctions and trade policies steer the tanker path.
đ Market and Stocks: Navigating Volatility
Stock Performance
Tanker stocks reflect resilience. International Seaways $INSW (-0.81%) reports $40 million adjusted net income ($0.80 per share), beating estimates, with VLCCs at $42,800 per day (Q2 guidance). DHT Holdings $DHT (-0.18%) achieves $48,700 per day spot rates (72% booked), up 34% from Q1, with $0.15 per share dividend. BP $BP. (+0.43%) sells six 46,000-dwt MRs for $192 million, possibly to Tsakos Group $TNP (-0.03%) (nine Suezmax newbuildings, $1.34 billion). Scorpio Tankers $STNG (-0.09%) and Hafnia $HAFNI (+0.67%) are Fearnleyâs top picks for MR/LR2 strength. Clarksons notes tanker earnings at $35,000 per day (45% above 10-year average)âstocks balance geopolitical risks with demand growth.
Investor Insights
VLCCs may rebound with OPEC+ hikes and rising inventories, but sanctions pose risks. Suezmax and Aframax rely on Kazakhstan and Norwegian crude, though Atlantic oversupply caps gains. Clean markets face 2026 headwinds (6.3% fleet growth), but MR benefits from U.S. diesel demand and GTL trades. Seawaysâ $INSW (-0.81%) VLCC buyback ($250 million refinancing) and Tormâs $TRMD A (-0.22%) neutral Red Sea outlook signal confidence. Low crude fleet growth (2.4%) and sanctions risks shape strategiesâinvestors weigh trade disruptions against supply constraints.
Sector Outlook
Sanctions, Houthi ceasefire talks, and Red Sea dynamics pressure rates, but OPEC+ hikes and new fields drive demand. Clarksonsâ 2026 forecast (crude steady, clean easing) highlights clean oversupply risks. MR and Handymax benefit from clean fuel trades, while Suezmax and Aframax rely on CPC and Johan Castberg flows. Stocks like Seaways $INSW (-0.81%) (strong liquidity, $673 million) and DHT $DHT (-0.18%) (undervalued) offer value if demand holdsâinvestors balance short-term volatility with long-term fundamentals.
đ Outlook: Charting Future Waves
Market Projections
VLCC ranges $41,000-$50,000 per dayâOPEC+ hikes offer upsideâcautious. Suezmax at $36,000-$44,500âAtlantic weakness persistsâchallenged. Aframax at $29,000-$43,500âresilience holds, but oversupply loomsâsteady. Clean varies: LR2/LR1 at $23,400-$28,800 (softening), MR at $12,000-$20,900 (stabilizing), Handymax at $10,000-$13,000 (pressured)âmixed. Red Sea normalization and sanctions signal volatilityâ2026 could soften with fleet growth.
Strategic Horizons
VLCCs leverage OPEC+ and U.S.-India flows, but Suezmax needs Atlantic demand. Aframaxâs repositioning ensures stability, while MR capitalizes on clean fuel arbitrage. Handymax risks stagnation without new cargoes. Sanctions, 2026 fleet growth (6.3% clean), and trade talks challenge margins, but low crude fleet growth (2.4%) and new fields offer upside. Investors must navigate sanctions and geopolitical shifts while betting on supply constraintsâstrategic moves will define tanker fortunes.
Your Call
Will VLCCs rebound with OPEC+ hikes, or can MRâs clean fuel trades lead the way? Share your takeâletâs conquer the markets! đą
1 Year T/C - VLCC SUEZMAX AFRAMAX ECO / SCRUBBER - May 7th
*The Worldscale (WS) rate is a system used to calculate tanker freight rates, where WS 100 represents a standard base rate for a specific route. Rates above or below this benchmark indicate how much more or less a charterer will pay relative to the base cost. A higher WS rate means better earnings for shipowners, while a lower WS rate means lower transportation costs for charterers.
+ 1
Today I invested in $SHEL (+0.76%) .
Bought 10 shares at an average price of âŹ28.775 per share including transaction costs.
In total I now own 125 shares, this gives me +- âŹ161 per year in dividend
#shell
#invest
#investing
#dividend
#dividends
#dividende
#stocks
$BP. (+0.43%)
$CVX (+0.08%)
$SHEL (+0.76%)
$TTE (+0.49%)
$XOM (+0.08%)
Early May 2025 sees the tanker market at a crossroads. Very Large Crude Carriers (VLCCs) capitalize on Chinaâs strategic oil stockpiling, Suezmax softens amid West African demand dips, Aframax maintains resilience, and Clean markets show mixed fortunes with LR2/LR1 weakening and MR recovering. U.S. tariffs, Houthi sanctions, and Kazakhstanâs crude surge shape the horizon, while new Norwegian fields and rerouted clean fuels offer opportunities. This sector is a tanker navigating global currentsâletâs explore its journey.
⏠VLCC Market: Buoyant on Chinese Demand
Rate Fluctuations
VLCCs, the giants of crude transport, ride a wave of Chinese demand but face tariff headwinds. The Baltic Exchangeâs TD3C (270,000 mt Middle East Gulf-to-China) rate drops 5.5 points to WS67, yielding a round-trip time-charter equivalent (TCE) of $51,134 per day. West Africa-to-China (TD15) eases 2.5 points to WS67.13 ($51,690 per day), while U.S. Gulf-to-China (TD22) rises by $411,358, achieving a TCE of $51,054 per day. Clarksonsâ fleet-weighted average hits $59,700 per day, up 9% week-on-week, despite a quiet Middle East Gulf (MEG) market post-rally (mid WS70s for MEG/East). Charterers hold back on second-decade MEG fixtures, creating uncertaintyâVLCCs remain robust but cautious.
Cargo Dynamics
Chinaâs crude imports surge to 11 million barrels per day in April, the highest since August 2023, driven by strategic stockpiling amid low crude stockpiles (six-year low) and easing Brent prices ($70 in early March). Imports from Iran (1.71 million bpd) and Russia rise, though U.S. crude faces tariff risks (125% on WTI Midland). Two VLCCs (319,000-dwt each) divert from China to Singapore and Malaysia, while a 319,000-dwt vessel discharges 1.99 million barrels in Ningbo, possibly under tariff exemptions. Middle East and West African cargoes slow for third-decade fixtures (8 million barrels covered), but OPECâs May production boost supports sentiment. Venezuelaâs âzombieâ VLCCs (e.g., 320,000-dwt ship spoofing as a scrapped vessel) add riskâChinaâs demand drives VLCC strength, tempered by trade uncertainties.
Global Forces
U.S.-China tariffs (affecting 0.4% of seaborne oil trade) and potential exemptions (e.g., for crude) create volatility, with five VLCCs fixed for May U.S.-China voyages at risk of diversion. Houthi sanctions blacklist vessels delivering to Yemenâs Ras Isa port, impacting VLCC counts. Red Sea rerouting via the Cape of Good Hope persists, boosting tonne-miles. Chinaâs refinery maintenance (April-May) typically curbs demand, but strategic buying defies trends. Low fleet growth (2.4% in 2026) and OPECâs potential June output hike signal upside, though trade tensions and sanctions cloud the outlookâVLCCs sail with guarded optimism.
For illustrative purposes
âł Suezmax Market: Atlantic Softness
Rate Declines
Suezmax vessels, key for West African and Black Sea crude, face softening rates. The Balticâs TD20 (130,000 mt Nigeria-to-UK Continent) falls 10 points to WS109.17, yielding a TCE of $50,178 per day. Guyana-to-UK Continent (TD27) drops 9 points to WS107.5 ($48,939 per day), while CPC-to-Augusta (TD6) loses 4 points to WS131.55 ($63,500 per day). Middle East-to-Mediterranean (TD23) holds steady at WS91. Rates hit a 2025 high of $56,540 per day in early April, but West African demand tails off, eroding gainsâSuezmax navigates a challenging Atlantic market.
Regional Trends
West Africa sees reduced enquiry, with only 20 suitable Suezmax vessels available for third-decade fixtures, signaling further softening below WS110. U.S. Gulf crude struggles eastbound, boosting transatlantic activity (WS95), but local tonnage erodes. Chinaâs resumption of Kazakhstan CPC crude imports (240,000 bpd in April) via Novorossiysk supports TD6 stability, with nine cargoes fixed for May-June. Norwegian Johan Castberg field (135,000 bpd in May) adds demand, with a 158,000-dwt vessel loading 700,000-barrel stems. Black Sea and Mediterranean markets benefit from CPC flows, but Atlantic oversupply persistsâSuezmax relies on new trade lanes.
External Pressures
U.S. port fees exempt sub-80,000 dwt vessels, sparing smaller Suezmax units, but tariffs on Venezuelan oil and Houthi sanctions increase risks. Red Sea disruptions extend voyage times, supporting TCEs. Kazakhstanâs 1.7 million bpd output sustains CPC exports, though OPEC+ cuts (down 160,000 bpd in April) temper volumes. Chinaâs property crisis and renewable energy push may curb oil demand, per Clarksons, but Johan Castbergâs light crude offers European refiners an alternative. Low fleet growth (2.4% in 2026) and geopolitical risks (e.g., Russia-Ukraine ceasefire) shape prospectsâSuezmax seeks balance amid Atlantic weakness.
For illustrative purposes
â±ïž Aframax Market: Resilient Amid Pressure
Rate Stability
Aframax vessels, versatile crude carriers, hold steady despite softening trends. The Balticâs TD7 (80,000 mt Cross-UK Continent) slips 4 points to WS135 ($49,100 per day, Hound Point-to-Wilhelmshaven). Cross-Mediterranean (TD19) drops 4 points to WS176.61 ($54,700 per day, Ceyhan-to-Lavera). Atlantic routes weaken, with East Coast Mexico/U.S. Gulf (TD26) and Covenas/U.S. Gulf (TD9) falling 10 points to WS178-177 ($46,500 and $43,800 per day). U.S. Gulf-to-UK Continent (TD25) slides 3.5 points to WS170 ($44,517 per day). Signal Groupâs pool reports $60,700 per day for May (27% fixed), reflecting strategic repositioningâAframax remains resilient but faces downward pressure.
Market Dynamics
North Sea rates stabilize despite limited activity, with second-decade stems busier but growing tonnage lists threatening softness. Mediterranean markets soften as Libyan and Ceyhan dates advance, with North Sea competition adding pressure. U.S. Gulf sees no Aframax spillover from Suezmax, and Nigerian crude struggles limit enquiry. Signal Groupâs repositioning to U.S. Gulf and Central Europe (from U.S. West Coast and Lithuania) captures market strength, achieving $43,600 per day in April (98% fixed). Kazakhstan CPC crude and Johan Castberg cargoes support rates, but Mediterranean tonnage balance weakensâAframax holds firm, eyeing new opportunities.
Broader Forces
U.S. port fee exemptions benefit sub-80,000 dwt Aframax vessels, and Scorpio Tankers notes minimal impact from China-targeted fees due to fleet structure (South Korean-built, sub-55,000 dwt). Houthi sanctions and Venezuelan tariff risks deter operators, while Red Sea rerouting boosts tonne-miles. Clarksons forecasts 2.4% crude fleet growth in 2026, outpacing 0.5% demand, signaling rate pressure. Kazakhstanâs CPC surge and Norwayâs Johan Castberg (220,000 bpd by Q2) provide upside, but trade tensions and oversupply loomâAframax navigates with cautious confidence.
An F/A-18E Super Hornet prepares to launch off the USS Harry S. Truman - For illustrative purposes
âžïž Clean Market: Mixed Fortunes
Rate Divergence
Clean tanker markets show varied performance. LR2 rates dip, with TC1 (75kt MEG/Japan) falling 2 points to WS124.44 and TC20 (90kt MEG/UK-Continent) dropping $85,000 to $3.5 million. LR1 rates sink further, with TC5 (55kt MEG/Japan) losing 13 points to WS134.06 and TC8 (65kt MEG/UK-Continent) falling to $2.714 million. MR markets recover, with TC17 (35kt MEG/East Africa) up 2 points to WS213.21 ($21,800 per day) and U.S. Gulf TC14 (38kt/UK-Continent) gaining 13 points to WS122.5. Handymax struggles, with TC6 (Baltic) dropping 32.5 points to WS136.94 and TC23 (30kt Cross-UK-Continent) falling 20 points to WS151.67âClean markets reflect regional splits.
Trade Patterns
MEG LR2/LR1 rates weaken as demand softens, while UK-Continent LR1s hold at WS130 ($24,000 per day). MR markets rebound, driven by U.S. Gulf strength (TC18 up 9 points to WS166.79) and Caribbean runs (TC21 up $77,000 to $589,286). Handymax faces pressure from oversupply and weak Baltic/UK-Continent demand. A 50,000-dwt MR delivers 35,000 tonnes of Qatarâs GTL diesel to the U.S. Gulf, capitalizing on tightening diesel inventories (down 2.4 million barrels). Mediterranean and U.S. Gulf MR markets benefit from repositioning, but Handymax lagsâClean tankers navigate a fragmented landscape.
Influencing Factors
U.S. port fees minimally impact MR and Handymax (sub-55,000 dwt), but LR2 faces risks, though Scorpio notes limited U.S. exposure. Red Sea disruptions support clean tonne-miles, but Clarksons forecasts 6.3% clean fleet growth in 2026 with flat demand, pressuring rates. Qatarâs GTL shipment signals new arbitrage, while Chinaâs potential tariff exemptions (e.g., for chemicals) could boost clean trades. Houthi sanctions and Venezuelan risks deter operators, but U.S. diesel demand offers MR upsideâClean markets balance opportunity with oversupply risks.
The Torm Belis - For illustrative purposes
đ Whatâs Moving It: Oil Flows and Trade Policies
Commodity Shifts
Chinaâs 11 million bpd crude imports (April) drive VLCC demand, fueled by Iranian (1.71 million bpd) and Russian cargoes, though U.S. crude faces tariff hurdles. Kazakhstanâs CPC crude (240,000 bpd) and Norwayâs Johan Castberg (135,000 bpd) boost Suezmax and Aframax. Venezuelan âzombieâ tankers (e.g., spoofing scrapped VLCCs) sustain illicit flows. Clean markets see GTL diesel from Qatar to the U.S. (35,000 tonnes) and tightening U.S. diesel inventories, supporting MR. OPECâs May output hike and potential June increase lift crude sentiment, but Chinaâs refinery maintenance curbs upsideâoil flows shape tanker dynamics.
Trade and Policy Pressures
U.S.-China tariffs (0.4% of oil trade) and potential exemptions (e.g., for crude, chemicals) create uncertainty, diverting VLCCs to Singapore/Malaysia. Houthi sanctions blacklist vessels at Yemenâs Ras Isa, impacting crude and clean trades. U.S. port fees exempt sub-55,000 dwt tankers, sparing MR/Handymax, but Venezuelan tariffs and Red Sea rerouting increase costs. Geopolitical risks (e.g., Russia-Ukraine ceasefire, Trumpâs policies) and Clarksonsâ 2026 forecast (2.4% crude, 6.3% clean fleet growth) signal rate pressure. Kazakhstanâs CPC surge and Qatarâs GTL trade offer opportunitiesâtrade policies steer the tanker path.
đ Market and Stocks: Balancing Volatility
Stock Performance
Tanker stocks navigate trade uncertainties. Scorpio Tankers $STNG (-0.09%) reports strong Q1 earnings, beating expectations, with a $397 million cash balance and 10% loan-to-value ratio. Its MR/Handymax fleet (sub-55,000 dwt) avoids U.S. port fee impacts, and LR2s face minimal U.S. exposure. BP $BP. (+0.43%) sells six 46,000-dwt MRs for $192 million ($32 million each), possibly to Tsakos Group $TNP (-0.03%) , which secures nine Suezmax newbuildings ($1.34 billion). Scorpioâs 115,000-dwt LR2 earns $32,000 per day (two-year charter), and its 38,700-dwt Handysize fetches $24,000 per day. Clarksons notes tanker earnings at $35,000 per day (45% above 10-year average)âstocks reflect resilience amid risks.
Investor Insights
VLCC rates may soften if MEG fixtures remain quiet, but Chinaâs stockpiling and OPEC output support sentiment. Suezmax and Aframax benefit from Kazakhstan and Norwegian crude, though Atlantic oversupply caps gains. Clean markets face 2026 headwinds (6.3% fleet growth), but MR strength (e.g., U.S. diesel demand) offers upside. Scorpioâs conservative capital allocation (minimal buybacks, $339 million in 2024) reflects geopolitical caution, while Tsakosâ fleet expansion signals long-term optimism. Low crude fleet growth (2.4%) and sanctions risks shape strategiesâinvestors weigh trade volatility against supply constraints.
Sector Outlook
U.S. tariffs, Houthi sanctions, and Red Sea rerouting pressure rates, but Chinaâs crude imports and new fields (e.g., Johan Castberg) drive demand. Clarksonsâ 2026 forecast (crude earnings steady, clean easing) highlights oversupply risks, particularly for LR2/LR1. MR and Handymax benefit from U.S. diesel and GTL trades, while Suezmax and Aframax rely on CPC and Norwegian flows. Stocks like Scorpio (trading below net asset value) and Tsakos (expanding fleet) offer value if demand holdsâinvestors balance short-term risks with long-term fundamentals.
đ Outlook: Charting Future Currents
Market Projections
VLCC ranges $50,000-$60,000 per dayâChinaâs demand sustains strengthâbuoyant. Suezmax at $48,000-$63,000âAtlantic softness limits upsideâcautious. Aframax at $43,000-$54,000âresilience persists, but oversupply loomsâsteady. Clean varies: LR2/LR1 at $15,000-$24,000 (weakening), MR at $15,000-$22,000 (recovering), Handymax at $10,000-$15,000 (pressured)âmixed. Red Sea rerouting and new trades signal volatilityâ2026 could soften if fleet growth outpaces demand.
Strategic Horizons
VLCCs thrive on Chinese and OPEC flows, but Suezmax needs stronger Atlantic demand. Aframaxâs repositioning (e.g., Signalâs U.S. Gulf focus) ensures stability, while MR capitalizes on clean fuel arbitrage. Handymax risks stagnation without new cargoes. Tariffs, sanctions, and 2026 fleet growth (6.3% clean) challenge margins, but low crude fleet growth (2.4%) and new fields offer upside. Investors must navigate geopolitical uncertainties while betting on supply constraintsâstrategic moves will define tanker fortunes.
Your Call
Will VLCCs lead with Chinese demand, or can MRâs clean fuel surge steal the spotlight? Share your takeâletâs master the markets! đą
1 Year T/C - VLCC SUEZMAX AFRAMAX ECO / SCRUBBER - April 30th
*The Worldscale (WS) rate is a system used to calculate tanker freight rates, where WS 100 represents a standard base rate for a specific route. Rates above or below this benchmark indicate how much more or less a charterer will pay relative to the base cost. A higher WS rate means better earnings for shipowners, while a lower WS rate means lower transportation costs for charterers.
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The BP share ($BP. (+0.43%) / ISIN: GB0007980591) is currently the focus of many investors. After falling by over 25% in the last twelve months, the share price is currently trading at around âŹ4.27 . The 52-week low was ⏠3.91 on April 11, 2025.
In the first quarter of 2025, BP fell well short of profit expectations: adjusted profit amounted to $ 1.38 billion, while analysts had expected $ 1.65 billion . In addition, the share buyback program was reduced from $1.75 billion to $750 million, which caused displeasure among investors. Net debt rose to USD 27 billion, which limits the company's financial flexibility.
One possible ray of hope is the interest of $SHEL (+0.76%) in a takeover of BP. Shell is closely monitoring the BP share price and the oil price trend before taking any concrete steps. Such a merger could help BP to overcome structural problems and exploit synergies.
Despite the current challenges, BP offers an attractive dividend yield of around 6.7% . However, analysts are divided: of 30 experts surveyed, 12 recommend buying the shares, 17 recommend holding and one recommends selling .
Conclusion: BP shares are in a difficult phase with financial and strategic challenges. However, the possible takeover interest from Shell could provide new impetus. Investors should monitor developments closely and weigh up their decisions carefully.
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