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All the shipping industry’s eyes are on Greece

All the shipping industry’s eyes are on Greece this week as the international shipping exhibition “Posidonia 2022” returns and will take place from today until next Friday at the Athens Metropolitan Expo. But eyes are also on OPEC+ as the decision to increase output by 648,000 barrels per day in July and August, instead of the previously agreed 432,000 bpd, was seen as hardly enough to compensate for the lost supply from Russia. At the same time the European Union finally overcame Hungarian objections to approve the bloc’s sixth sanctions package against Russia, including a partial ban on crude imports.
The Russian invasion of Ukraine has created energy chaos pushing major energy commodities too high. WTI and Brent oil futures are constantly steady above USD 115 per barrel, the highest point since March 8th 2022. Natural Gas futures eased around USD 8.2 per million British thermal units but the price remains elevated and close to a 14-year high of USD 9.45.
But high prices don’t apply to everyone. While West Economies are announcing more & more sanctions towards Russia, Asian ones are gaining an advantage in negotiating bigger discounts for spot Russian cargoes. There are already signs that Russia is becoming more reliant on Asia. In particular, China and India try to seal some long-term contracts for Russian crude oil with almost a 35% price discount, as the EU moves to distance itself from Russian oil. Before the latest COVID lockdowns dampened demand, China was the largest buyer of Russian crude. There is tremendous activity at China's independent refineries in Shandong this month to secure deals for Russian Urals. At least 8 more cargoes are expected later this month after the first cargo since November 2021 arrives. But India has also entered the “game” as 836,000 b/d of Urals crude were imported in April compared to just 274,000 b/d and zero in March and February respectively. In Japan, Singapore, China, South Korea and Thailand, refinery feedstock managers and traders reported that Russian producers and various other equity holders of Urals Blend crude as well as Far East Russian ESPO, Sokol, and Sakhalin Blend crude are continuing to approach refiners and trading companies to inquire about their interest in purchasing medium sour and light sweet grades at discounted prices. Tanker freight rates have not yet showed any significant reaction to these major oil flow swifts but it remains to be seen whether this will positively affect the rates & boost them higher.
Maybe the energy surge and the high commodities prices have not significantly affected tankers freight rates yet, but it can not be said the same for the LNG market. The market boom started after the EU announced the reduction of its dependence on Russian gas by two-thirds by the end of the year and its intention to import an extra 50bn cubic meters of LNG. Since then an unusually early annual rush is underway for the likes of the UK’s Shell, France’s TotalEnergies and China’s Unipec to secure enough shipping capacity to transport the superchilled fuel during the peak winter demand season. Almost all the world’s largest gas traders are scrambling to secure liquefied natural gas tankers ahead of winter after sanctions on Russia following its invasion of Ukraine triggered a reshaping of global energy flows. As market sources say, its very hard to find any ships in the market. Rates to charter an LNG tanker of 160K CBM for a year (USD 120k per day) are trading near their highest level of USD 150,000/day in a decade (19 Nov 2021), while the spot rate is at USD 85k and has already taken the “north” road. Second-hand prices have not stayed unaffected. Watching the graph below, it is noteworthy that since February 2022 prices have rebounded and with an increase of 15% have returned to levels not seen since August 2016.
Sale and Purchase:
On the Capesize sector, the “Rosebank” - 177K/2010 New Times committed on subjects for USD 27.5mills. 2 x Kamsarmaxes changed hands for high USD 37 mills each, the “Nord Lyra”- 82K/2020 Yamic which was sold to clients of NCC basis delivery mid- December & her sister “Nord Luna” which was sold to Greek buyers basis delivery within August. The BWTS fitted Panamax “Orient Prima“- 77K/2005 Imabari found new owners for high USD 16 mills. On the handysize sector, clients of Tufton Oceanic are rumoured to have acquired the “Interlink Dignity”-38K/2015 Huatai Heavy for USD 26.3 mills. Finally, Turkish buyers acquired the BWTS fitted Handysize “Super Kate” - 32K/2008 Hakodate for USD 16.8 mills.
The activity on the wet market was slightly increased compared to the previous week. On the VLCC sector, the BWTS fitted “Duqm”- 310K/2008 Imabari was sold for region USD 39mills. Greek buyers acquired the Suezmax “Marvin Star”- 158K/2009 Hyundai Samho via auction for USD 26.4mills. Finally, 8x BWTS fitted HMD built MRs, the “Maersk Caelum”- 46K/2016, the “Maersk Navigator” - 46K/2016, the “Maersk Seafarer” - 46K/2016 the “Maersk Cirrus” - 40K/2017, the “Maersk Altus” - 40K/2017, the “Maersk Stratus”- 40K/2017, the “Maersk Cumulus”- 40K/2016 & the ”Maersk Nimbus” - 40K/2016 committed on subjects for USD 230 mills to clients of Kmarin.

Xclusiv Shipbrokers Inc.