The VLCC freight party might be ending soon, with no feedstocks to support the freight. Oil prices reached a breakthrough $100 per barrel for the first time in more than three and a half years Sunday as the Iran war hindered production and shipping in the Middle East.
Commentary
The VLCC freight party might be ending soon, with no feedstocks to support the freight. Oil prices reached a breakthrough $100 per barrel for the first time in more than three and a half years Sunday as the Iran war hindered production and shipping in the Middle East.
OVERVIEW
The VLCC freight party might be ending soon, with no feedstocks to support the freight. The freight future curve on VLCC trade route TD3C measured by the Baltic exchange shows backwardation. Some refineries declared force majeure while some are on severe margin pressures due to cannot fulfil the current market order and forced to abandoned contracts. This has led the market to believe that last week’s market euphoria may not be sustained by cargo demand.
The energy import reliance countries especially Japan and Korea are looking for alternative energy sources such as Africa, Russia, Venezuela, and the United States to name a few.
China is withstanding the war quite well, especially with their massive SPR And shadow fleets which carries Russian oil into their tea pots refineries.
US Treasury Secretary Scott Bessent has also looked into the idea to lift the sanction towards Russian oil. This will create supply to the economy and withstand the supply shock and oil price inflation.
Over at home, Trump is also facing mounting pressure to control the oil price into bearable level for the American people and its own economy. Stabilizing oil price was one of Trumps promises during his presidential campaign.
Jet is facing an all-time high with over $200 per barrel in the Singapore jet fuel price last Wednesday. Major airports are nervous over the scarcity of the jet fuel and refineries are shying away to maintain production level amidst the low level of feedstock.
The market is closely watching the crude supply recovery. If the refinery throughput is significantly below capacity, the recent freight rate euphoria which saw VLCC earnings reach $490,000-$770,000 per day, may correct lower.
Brent Crude oil last week was traded close to USD 90 per barrel. This would cascade towards the sharp rise in prices of consumer goods.
Source: Business Insider (Click here to read more)
On Monday morning in Asia, oil price reached a breakthrough by more than 25% touching $119.50 per barrel for the first time in more than three and a half years. Iran war hinders production and shipping in the Middle East, and Gulf Arab states cutting production due to out of storage space. Oil price eases at $107 per barrel after G7 considers emergency reserve release in countering the effect of the Middle East war.
The oil price shock is expected to hurt consumers’ wallet from petrol to groceries, household utilities and more. Market expects a prolonged high oil price is unsustainable for the global economy.
MR MARKET OUTLOOK FOR THE NEXT 5-7 DAYS
India gets a 30-Day Waiver from US To Purchase Russian Oil Amid Iran War. The move came as the US seeks to stabilise global energy markets amid rising tensions in the Middle East following its operation in Iran. This is a pulling factor of ballasting ships are accumulating in the Indian Ocean which spiral WCI-Japan downwards.
Singapore was facing downward pressure as refiners across Asia are struggling to replace Middle East crude and feedstock. Companies in Singapore and South Korea declaring force majeure or cutting output because feedstock cannot arrive normally. Singapore petrochemical firm PCS and Singapore refinery and petrochemical major Aster Chemicals and Energy has declared force majeure regarding supplies.
South Korea is prepared to release oil from its strategic reserves and supply stored petroleum to the domestic market if the ongoing conflict in the Middle East continues and depletes private inventories.
Officials indicated at the meeting that they have several months’ worth of oil and gas inventories to respond to demand — well above the International Energy Agency’s 90-day recommendation.
As of late 2025, state-owned Korea National Oil Corp. or KNOC held approximately 100 million barrels of government-controlled oil reserves, excluding international joint stockpiles. Combined with private sector holdings, South Korea’s total strategic reserves equate to roughly 200–208 days of demand.
The closure of the Strait of Hormuz has prevented a number of vessels from exiting the Gulf, with some remaining at anchorage awaiting further instructions while others continue operating cautiously under significantly higher war-risk and insurance premiums. In response to the rising geopolitical risk, several SR owners have already begun ballasting vessels from West Coast India back toward the Straits region in search of safer employment should the situation escalate further.
The insurance environment has added another layer of complexity. Several underwriters have reportedly suspended coverage for voyages through the region, while others continue to offer cover only at substantially higher premiums. This has triggered cancellations and replacement enquiries across the market as charterers reassess risk exposure.
The disruption has also halted exports of several key oil, petrochemical and gas products from major Gulf producers including Saudi Arabia, Kuwait and Qatar. Commodities affected include LNG, crude oil, naphtha, methanol, paraxylene, styrene monomer and MEG. At the same time, reduced operating rates and force majeure declarations at certain Asian plants have further tightened supply chains. The combination of restricted Gulf exports and regional production cuts has pushed product prices higher, with India and China emerging as the primary demand centres for alternative supply. Market reports also indicate that China has instructed several refiners to curb oil exports in order to prioritise domestic supply.
SMALL TANKERS OVERVIEW
The closure of the Strait of Hormuz has prevented a number of vessels from exiting the Gulf, with some remaining at anchorage awaiting further instructions while others continue operating cautiously under significantly higher war-risk and insurance premiums. In response to the rising geopolitical risk, several SR owners have already begun ballasting vessels from West Coast India back toward the Straits region in search of safer employment should the situation escalate further.
The insurance environment has added another layer of complexity. Several underwriters have reportedly suspended coverage for voyages through the region, while others continue to offer cover only at substantially higher premiums. This has triggered cancellations and replacement enquiries across the market as charterers reassess risk exposure.
The disruption has also halted exports of several key oil, petrochemical and gas products from major Gulf producers including Saudi Arabia, Kuwait and Qatar. Commodities affected include LNG, crude oil, naphtha, methanol, paraxylene, styrene monomer and MEG. At the same time, reduced operating rates and force majeure declarations at certain Asian plants have further tightened supply chains. The combination of restricted Gulf exports and regional production cuts has pushed product prices higher, with India and China emerging as the primary demand centres for alternative supply. Market reports also indicate that China has instructed several refiners to curb oil exports in order to prioritise domestic supply.
News & Commentaries
The VLCC freight party might be ending soon, with no feedstocks to support the freight. Oil prices reached a breakthrough $100 per barrel for the first time in more than three and a half years Sunday as the Iran war hindered production and shipping in the Middle East.
The VLCC freight party might be ending soon, with no feedstocks to support the freight. The freight future curve on VLCC trade route TD3C measured by the Baltic exchange shows backwardation. Some refineries declared force majeure while some are on severe margin pressures due to cannot fulfil the current market order and forced to abandoned contracts. This has led the market to believe that last week’s market euphoria may not be sustained by cargo demand.
The energy import reliance countries especially Japan and Korea are looking for alternative energy sources such as Africa, Russia, Venezuela, and the United States to name a few.
China is withstanding the war quite well, especially with their massive SPR And shadow fleets which carries Russian oil into their tea pots refineries.
US Treasury Secretary Scott Bessent has also looked into the idea to lift the sanction towards Russian oil. This will create supply to the economy and withstand the supply shock and oil price inflation.
Over at home, Trump is also facing mounting pressure to control the oil price into bearable level for the American people and its own economy. Stabilizing oil price was one of Trumps promises during his presidential campaign.
Jet is facing an all-time high with over $200 per barrel in the Singapore jet fuel price last Wednesday. Major airports are nervous over the scarcity of the jet fuel and refineries are shying away to maintain production level amidst the low level of feedstock.
The market is closely watching the crude supply recovery. If the refinery throughput is significantly below capacity, the recent freight rate euphoria which saw VLCC earnings reach $490,000-$770,000 per day, may correct lower.
Brent Crude oil last week was traded close to USD 90 per barrel. This would cascade towards the sharp rise in prices of consumer goods.
Source: Business Insider
(Click here to read more)
On Monday morning in Asia, oil price reached a breakthrough by more than 25% touching $119.50 per barrel for the first time in more than three and a half years. Iran war hinders production and shipping in the Middle East, and Gulf Arab states cutting production due to out of storage space. Oil price eases at $107 per barrel after G7 considers emergency reserve release in countering the effect of the Middle East war.
The oil price shock is expected to hurt consumers’ wallet from petrol to groceries, household utilities and more. Market expects a prolonged high oil price is unsustainable for the global economy.
India gets a 30-Day Waiver from US To Purchase Russian Oil Amid Iran War. The move came as the US seeks to stabilise global energy markets amid rising tensions in the Middle East following its operation in Iran. This is a pulling factor of ballasting ships are accumulating in the Indian Ocean which spiral WCI-Japan downwards.
Singapore was facing downward pressure as refiners across Asia are struggling to replace Middle East crude and feedstock. Companies in Singapore and South Korea declaring force majeure or cutting output because feedstock cannot arrive normally. Singapore petrochemical firm PCS and Singapore refinery and petrochemical major Aster Chemicals and Energy has declared force majeure regarding supplies.
South Korea is prepared to release oil from its strategic reserves and supply stored petroleum to the domestic market if the ongoing conflict in the Middle East continues and depletes private inventories.
Officials indicated at the meeting that they have several months’ worth of oil and gas inventories to respond to demand — well above the International Energy Agency’s 90-day recommendation.
As of late 2025, state-owned Korea National Oil Corp. or KNOC held approximately 100 million barrels of government-controlled oil reserves, excluding international joint stockpiles. Combined with private sector holdings, South Korea’s total strategic reserves equate to roughly 200–208 days of demand.
(Source: OPIS, click here to read more)
The closure of the Strait of Hormuz has prevented a number of vessels from exiting the Gulf, with some remaining at anchorage awaiting further instructions while others continue operating cautiously under significantly higher war-risk and insurance premiums. In response to the rising geopolitical risk, several SR owners have already begun ballasting vessels from West Coast India back toward the Straits region in search of safer employment should the situation escalate further.
The insurance environment has added another layer of complexity. Several underwriters have reportedly suspended coverage for voyages through the region, while others continue to offer cover only at substantially higher premiums. This has triggered cancellations and replacement enquiries across the market as charterers reassess risk exposure.
The disruption has also halted exports of several key oil, petrochemical and gas products from major Gulf producers including Saudi Arabia, Kuwait and Qatar. Commodities affected include LNG, crude oil, naphtha, methanol, paraxylene, styrene monomer and MEG. At the same time, reduced operating rates and force majeure declarations at certain Asian plants have further tightened supply chains. The combination of restricted Gulf exports and regional production cuts has pushed product prices higher, with India and China emerging as the primary demand centres for alternative supply. Market reports also indicate that China has instructed several refiners to curb oil exports in order to prioritise domestic supply.
The closure of the Strait of Hormuz has prevented a number of vessels from exiting the Gulf, with some remaining at anchorage awaiting further instructions while others continue operating cautiously under significantly higher war-risk and insurance premiums. In response to the rising geopolitical risk, several SR owners have already begun ballasting vessels from West Coast India back toward the Straits region in search of safer employment should the situation escalate further.
The insurance environment has added another layer of complexity. Several underwriters have reportedly suspended coverage for voyages through the region, while others continue to offer cover only at substantially higher premiums. This has triggered cancellations and replacement enquiries across the market as charterers reassess risk exposure.
The disruption has also halted exports of several key oil, petrochemical and gas products from major Gulf producers including Saudi Arabia, Kuwait and Qatar. Commodities affected include LNG, crude oil, naphtha, methanol, paraxylene, styrene monomer and MEG. At the same time, reduced operating rates and force majeure declarations at certain Asian plants have further tightened supply chains. The combination of restricted Gulf exports and regional production cuts has pushed product prices higher, with India and China emerging as the primary demand centres for alternative supply. Market reports also indicate that China has instructed several refiners to curb oil exports in order to prioritise domestic supply.