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The VLCC race: US midstream companies plan to export more oil faster

Since the US crude market began to grow only a short time ago, there has been a race to see who can load the most crude in the quickest time into the largest vessels possible along the US Gulf Coast.

The stakes are high. Major Asian buyers are looking to load as much oil on to one vessel in order to maximize the economics of their US purchases. But the ports along the Gulf Coast were not built to accommodate the super tankers–Very Large Crude Carriers–which can carry around 2 million barrels of crude.

Iran becomes India’s no. 2 oil supplier

Iran was the second-biggest oil supplier to Indian state refiners between April and June, India’s oil minister said on Monday, replacing Saudi Arabia as companies took advantage of steeper discounts offered by Tehran.

India, Iran’s top oil client after China, shipped in 5.67 million tonnes or about 457,000 barrels per day (bpd) of oil from the country in the first three months of this fiscal year, Dharmendra Pradhan told lawmakers in a written reply. State refiners, accounting for about 60% of India’s 5 million bpd refining capacity, had curbed imports from Iran last year in protest against Tehran’s move to grant development rights for the giant Farzad B gas field to other parties.

Saudi Arabia suspends oil exports through red sea lane

Top oil exporter Saudi Arabia said on Thursday it was “temporarily halting” all oil shipments through the strategic Red Sea shipping lane of Bab al-Mandeb after an attack on two big oil tankers by Yemen’s Iran-aligned Houthi movement.

Saudi Energy Minister Khalid al-Falih said in a statement sent by his ministry that the Houthis had attacked two Saudi Very Large Crude Carriers (VLCCs) in the Red Sea on Wednesday morning, one of which sustained minimal damage. Yemen, where a Saudi-led coalition has been battling the Houthis in a three-year war, lies beside the southern mouth of the Red Sea, one of the most important trade routes in the world for oil tankers, which pass near Yemen’s shores while heading from the Middle East through the Suez Canal to Europe.

Singapore ex-wharf 380 CST bunker premium hits 3-month high

The Singapore ex-wharf 380 CST bunker premium hit a three-month high at the Asian close Tuesday, led by firm fundamentals in the high sulfur fuel oil cargo market, trade sources said this week.

The ex-wharf premium to Mean of Platts Singapore 380 CST high sulfur fuel oil assessments rose $1.29/mt day on day to $11.15/mt Tuesday. Ex-wharf 380 CST bunker fuel was assessed at $456.00/mt on Tuesday while 380 CST HSFO cargo was assessed at $444.85/mt, S&P Global Platts data showed.

The premium was last higher at $11.19/mt on April 25, 2018 — around the time bunker specification issues had surfaced. The cargo differential for 380 CST HSFO had surged to a near 37-month high of $7.18/mt at last Friday’s Asian close, and was last assessed higher at $7.19/mt on June 18, 2015, Platts data showed.

 

Russia to boost 2018 crude oil output

Russia’s energy ministry has revised up its forecast for 2018 domestic crude oil output to reflect the latest decision under the OPEC/non-OPEC deal on increasing crude output, energy minister Alexander Novak said Wednesday. Russia is now expected to produce 551 million mt this year, up 0.8% on the year, Novak said. The figure translates to 11.065 million b/d, under the widely used 7.33 barrels per metric ton conversion rate.

Sagarmala projects connecting ports being implemented

There are about 200 projects costing around Rs 2.5 lakh crore that have been identified under the ambitious Sagarmala programme for enhancing connectivity to Indian ports. These include 112 road projects, 70 rail projects, 11 inland waterways projects, 3 pipeline projects and 15 multimodal logistics parks.

Singapore delivered/ex-wharf 380 CST bunker spread may stay narrow

The spread between delivered and ex-wharf 380 CST bunker fuel prices had narrowed in recent days and could persist into the near term, trade sources said last week.

The price difference stood at $4/mt by the close of Asian trade Monday, and had narrowed for the seventh consecutive trade session, with delivered 380 CST bunker fuel assessed at $461.50/mt and ex-wharf bunker fuel assessed at $457.50/mt, S&P Global Platts data showed. Typically, a bunker fuel trader would have to sell delivered bunker fuel at a price of at least $5/mt above ex-wharf bunker fuel to achieve breakeven, according to trade sources. .

S Korea’s crude from Iran to fall

South Korea’s crude oil imports from Iran dropped 41% year on year in June ahead of the re-imposition of US sanctions on the Middle Eastern country, while intakes from Kazakhstan and Mexico jumped.

The Northeast Asian country imported 5.49 million barrels of crude from Iran last month, compared with 9.31 million barrels a year earlier, data released late Monday by the Korea National Oil Corp showed. Crude inflow from Iran has been declining since November last year when imports fell 26.8% year on year to 10.37 million barrels.

Asia-East coast North America sees normal container traffic

Demand growth has returned to the Asia-East Coast North America after a couple of bad months. It’s unclear whether the US-China trade war is factoring into carriers’ network decision making.

Having become accustomed to break-neck growth, the volume of container traffic between Asia and East Coast North America was disappointingly low for carriers in April and May, but things appear to have returned to normal in June.

Container shipments from Asia to ECNA slumped by 13% year-on-year in April and followed that with an 8% drop in May, according to pooled statistics from PIERS and CTS.

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