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Last updateΔευ, 01 Ιουλ 2024 7am

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Over two years since the Russian invasion of Ukraine

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Over two years since the Russian invasion of Ukraine, the EU continues its efforts to weaken Russia financially through sanctions. The latest move grants individual member states the authority to ban Russian Liquefied Natural Gas (LNG) imports. Under new EU gas market regulations, governments can prevent Russian and Belarusian gas exporters from participating in auctions for pipeline and LNG infrastructure capacity used to deliver gas to Europe. While pipeline gas imports from Russia to the EU dropped significantly in 2023 (down 84% compared to 2021), Russia remains a major supplier of LNG to Europe, generating substantial revenue from this trade. In fact, Europe's reliance on Russian LNG has grown in 2024. So far this year, Russia has supplied 4.89 million metric tons (mt) of LNG to Europe, representing over 16% of the continent's total LNG imports (33.65 million mt). This shows an increase compared to the 12.74% share Russia held in the first four months of 2023. Notably, France, Spain and Belgium have been the largest European importers of Russian LNG this year. Despite Russia's significant role in Europe's LNG market, the EU's decision alone may not be sufficient to end these imports. Full implementation requires backing from all EU member states, ensuring alternative suppliers like the US and Qatar can provide enough LNG to completely replace Russian imports. As of now, European LNG imports in 2024 total 33.65 million mt. The US leads the pack as the largest supplier with 51% of the market share, followed by Russia (16%), Algeria (10%), Qatar (8%), and Nigeria (4%).

Shifting focus from Russia to China, the Chinese economy is still seeking to establish a solid growth trajectory. As part of this effort, China recently announced plans to create a coal capacity reserve system by 2027. This system aims to bolster energy security by ensuring a more flexible and readily available supply of coal. By 2030, China strives to achieve a yearly coal capacity reserve of 300 million tonnes. Despite being the world's leading consumer and producer of coal, China has also seen a significant increase in seaborne coal imports. Compared to the first quarter of 2023, these imports jumped by 17% in the first quarter of 2024. On the other hand, China's independent refineries experienced a decline in bitumen blend imports during March 2024. However, this decrease is expected to be temporary. Once sanctions on Venezuelan crude oil expire, which is anticipated to happen by mid-April, imports are likely to rebound. If sanctions on Venezuelan oil are reinstated, China's independent refineries could become the sole buyers of this crude oil.

The International Energy Agency's (IEA) latest March report paints a contrasting picture of the global oil market. On one hand, oil demand is projected to climb higher than expected in the first quarter of 2024 (1Q24) by 1.7 million barrels per day (m b/d) due to an improved outlook for the US and increased bunkering activity. And on the other hand, world oil production is expected to dip by 870K b/d in 1Q24 compared to the previous quarter (4Q23) due to severe weather disruptions and production cuts implemented by OPEC+. This situation is further complicated by the ongoing geopolitical tensions. The impact of Houthi attacks and the rerouting of vessels around sanctions-hit Russian oil since 2022 have pushed oil tanker tonne-miles to record highs in 2024 (49.1 bn tonne-miles). This represents a significant increase compared to the pre-pandemic average of 44.5bn tonne-miles and even the peak during the Covid-19 period when 47.1bn tonne-miles were recorded.

Sale and Purchase

Dry:

On the Post-Panamax sector, the "Lowlands Rise" - 96K/2013 Imabari was sold for USD 26 mills. Greek buyers acquired the Kamsarmax "YMK Quartet"- 82K/2021 YAMIC for USD 35.5 mills. The Ultramax "Aries Sumire" - 64K/2020 Shin Kurushima was sold for USD 36 mills to clients of Meghna, while the Scrubber fitted and Electronic M/E "African Lion" - 67K/2013 Mitsui was sold for USD 24.5 mills to Greek buyers. On the Supramax sector, the scrubber fitted "Crowned Eagle" - 56K/2008 IHI changed hands for mid USD 16 mills. Last but not least, the Handysize "Perseus Harmony"- 37K/2020 Saiki found new owners for USD 29.5 mills.

Wet:

The LR1 "TTC Shakti" - 74K/2008 New Century changed hands for USD 28 mills. Moving down the sizes, the MR2 "Amfitrion" - 50K/2017 Samsung was sold for USD 43.5 mills to clients of D'amico, while the "Grand Ace5" - 46K/2006 STX changed hands for USD 21 mills. The MR1 "Golden Lavender" - 35K/2022 Fujian was sold for USD 36 mills to clients of Union Maritime. Finally, the chemical tanker "Sambong Artemis" - 11K/2018 STX found new owners for USD 23 mills basis TC attached at USD 13k/day till January 2025.

Xclusiv Shipbrokers Inc.

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