TANKERS

Arctic Sec: Tankers: VLs soar anew as market eyes shift in trade flows.

Following a wobbly start to the New year, the VLCC market is staging a sharp turnaround with the Baltic’s daily TCE assessment jumping+59% d-d yesterday. Suez- and Aframaxes followed suit, albeit gains were much more moderate, lifting the Baltic +3.9% in the process.

The US taking control of sanctioned Venezuelan crude, which means loving it to the market via compliant tonnage, is a near-term trigger. In the bigger picture, the market is eyeing a potential shift in China’s supply patterns, reducing its intake of sanctioned oils, after this week’s signals from the US that it is taking a tougher stance against sanctioned oils, thus boosting trade prospects for the compliant fleet.

Market sources are already reporting increased Chinese interest in Canadian supplies.

Fundamental news has also been on the strong side this week, further supporting rate strength. India’s Nov oil imports topped the 5 mbd mark for the first time since May, up a very strong +11% y-y, and Brazil’s Dec exports rose +0.15 mbd m-m, tying it for an all-time high with January. Its y-y gain was a spectacular +95%, although that owed more to and artificially depressed year-ago figure.

 Oil & tankers: Russia hits Ukraine with intermediate ballistic missile. This morning's Russian attack on Ukraine with an Oreshnik missile, one of its most advance weapons, further sharpens front. pushing any peace deal out. Market likely to see it as leading to a further step-up in sanctions. Brent up +$0.64 @ $62.63.