[xclusiv] S&P Report 11th March 2024


Market Commentary:

At their recent meeting in Dubai, the oil producers of OPEC+, with Saudi Arabia and Russia at the helm, followed through on what the market had anticipated. They agreed to extend voluntary oil production cuts by 2.2 million barrels per day (bpd) into the second quarter, providing additional support to oil prices amidst concerns about global economic growth and rising output from non-OPEC+ countries. Saudi Arabia confirmed it will extend its own voluntary cut of 1 million bpd through the end of June, keeping its production around 9 million bpd. Additionally, Russia will cut oil production and exports by a further 471,000 bpd in the second quarter.

Despite Russia’s decision to cut production, data suggests the country’s crude oil exports haven’t met its official target of a 300,000 bpd reduction compared to the May-June 2022 average during the first quarter of 2024. During the first two months, Russian crude export flows averaged around 3.4 million bpd, falling short of the May/June 2022 average of 3.66 million bpd by about 255,000 bpd. Russia’s seaborne oil exports in February remained relatively stable compared to January. China reportedly absorbed some volumes previously destined for India, while adverse weather and Ukrainian attacks on oil infrastructure appeared to have minimal impact on Moscow’s key trade flows. February saw roughly 3.4 million bpd of crude shipped from Russian ports, exceeding January’s 3.38 million bpd. However, oil product exports dipped by approximately 60,000 bpd month-on-month. Combined, Russia’s seaborne oil exports averaged 5.9 million bpd in February, which aligns with pre-war levels observed in early 2022. Crude oil tanker freight rates have been at very healthy levels for over five months now, driven by a combination of factors. The Baltic Exchange’s VLCC time charter equivalent (TCE) currently sits at USD 47,878/day, a remarkable turnaround from the negative USD -3,168/day recorded back in October 6, 2023. Similarly the Suezmax TCE has climbed to USD 37,603/day, more than triple the September 22nd, 2023, low of USD 9,467/day. Aframax TCE has also seen a significant increase, reaching USD 39,580/day, over five times higher than the September 11th, 2023, low of USD 7,552/day. Geopolitical trends have played a key role in supporting market activity, coupled with low fleet growth and a rise in oil demand.

Almost four months after the initial Houthi attack, the Red Sea crisis continues to escalate. Earlier this month, the first reported sinking of a ship occurred after being hit by Houthi missiles in mid-February. On top of that, another Houthi missile attack took place on March 6th, 2024, marking the first fatal strike. Although a growing number of vessels are taking the longer route around the Cape of Good Hope, to avoid Houthi attacks in the Red Sea, Chinese suppliers intend to persist in shipping steel through the Red Sea Route, despite the vessel attacked on 6th March was transporting Chinese steel products. In the meantime, China’s export and import growth surpassed expectations in the January-February period, indicating a positive shift in global trade dynamics. This serves as an encouraging signal for policymakers striving to bolster a faltering economic recovery. Exports from the world’s second-largest economy during these two months showed a 7.1% increase compared to the previous year, while imports rose by 3.5%, exceeding the anticipated growth of 1.5%. In February, crude oil imports reached 11.73 million barrels per day (bpd), reflecting an increase from the 11.31 million bpd recorded in January. Additionally, the importation of all coal grades demonstrated strength in the initial two months of this year. It is estimated that the seaborne arrivals of 28.4 million tons in February and 34.0 million in January, resulting in a combined total of 62.4 million tons.

Sale and Purchase


Chinese buyers acquired the Capesize “Castillo De Catoira” – 174K/2005 Bohai for high USD 16 mills. Moving down the sizes, Safe Bulkers announced the sale of the Post-Panamax “Panayiota K”- 92K/2010 Sungdong for USD 20.45 mills basis delivery in April 2024. The Scrubber fitted Kamsarmax “Sanko Hawking” – 83K/2021 Tsuneishi was sold for USD 41.5 mills. Safe Bulkers also sold the Panamax “Paraskevi 2” – 75K/2011 Sasebo for USD 20.3 mills to Greek buyers basis delivery in July 2024. Greek buyers acquired also the Supramax “Aulac Vanguard” – 56K/2012 IHI for high USD 18 mills. On the Supramax sector, the “Gant Muse” – 56K/2004 Mitsui changed hands for USD 11.4 mills. Last but not least, on the Handysize sector, the OHBS, Electronic M/E “Western London”- 39K/2015 JNS was sold for region USD 19 mills to European buyers, while the OHBS, Electronic M/E “Western Panama” – 39K/2015 JNS was sold for USD 18.5 mills to Vega Bulk buyers. Moreover, on the same sector, the “Rin Treasure” – 28K/2009 Imabari found new owners for mid USD 9 mills.


On the VLCC sector, the Scrubber fitted “C. Vision” – 314K/2004 Samsung changed hands for USD 32 mills, while the Scrubber fitted Japanese built “Achelous” – 300K/2004 IHI was sold for USD 30 mills. Turkish buyers acquired the Suezmax “Karvounis” – 156K/2013 Sumitomo for USD 67.5 mills. Finally, the MR2 “Glenda Melanie” – 47K/2010 HMD was sold for USD 27.5 mills to Chinese buyers.

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