VLCCs booked as floating storage as rates rebound

Market: Crude oil
11/03/20

At least four very large crude carriers (VLCC) have been booked as floating storage following the oil market's deepened contango and all for a period up to six months.

Shell booked the Sea Lion and the Sea Pearl from Shipowner Angelef, St Shipping booked the Europe from Euronav and an unnamed charterer took the Ridgebury Progress for a period charter to be used as floating storage. The average term of the deals was at five months with the average price just over $40,000/d. But more floating storage deals in the short term are less likely as the current fixing "rush" is holding strong for a second session. Spot rates are increasing with every consecutive fixture and shipowners are reluctant to commit their vessels at a period charter when spot earnings are considerably higher.

As a VLCC chartering "rush" continues for a second session, spot rates are on track to reach a five month high at today's close. Before noon fixtures from the Mideast Gulf to east Asia were reported at WS147 or $30/t levels, and the highest since the early October spike. At the time, spot earnings were estimated at around $100,000/d, with the Mideast Gulf to east Asia — depending on the discharge destination — reaching up to $127,000/d for a non-scrubber fitted vessel. The "rally" is expected to continue further during the week with Abu Dhabi's state-owned Adnoc joining in and increasing its crude output for April, introducing an extra 1mn b/d.

By Nikos Kokolinakis

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

01/05/25

Ukraine, US sign reconstruction deal

London, 1 May (Argus) — The government of Ukraine has agreed a "reconstruction" deal with the US that will establish a fund to be filled with proceeds from new mineral extraction licenses. There are few firm details about how much money will be involved, or how any future extraction contracts will be structured. It appears to be the same agreement that came close to being signed in February , which collapsed after an awkward meeting in the White House between Ukrainian president Volodymyr Zelenskiy and his US counterpart Donald Trump. Washington had pitched the deal in advance as providing stakes in Ukraine's mineral rights, as a form of repayment for past US support and a deterrence against future military incursions by Russia. There is no firm indication from either side that this is the case. Ukraine's economy minister Yulia Svyrydenko said today that 50pc of state budget revenues from new licences will flow into the fund, and the fund would then invest in projects in Ukraine itself. US treasury secretary Scott Bessent said the deal "allows the US to invest alongside Ukraine, to unlock Ukraine's growth assets, mobilise American talent, capital and governance standards", suggesting US companies will be involved in the new licenses. He said the fund will be established with the assistance of the US International Development Finance Corporation. Ukraine was eager to show the deal as a success. Svyrydenko said Kyiv will retain ownership of all resources, and "will decide where and what to extract." Neither does the agreement allow for privatisation of state-owned oil and gas company Ukrnafta or power company Energoatom, nor does it mention any debt obligation to the US, she said. The depth of Ukraine's resources are unclear. The country's geological survey shows deposits of 24 of the EU's list of critical minerals, including titanium, zirconium, graphite, and manganese, along with proven reserves of metals such as lithium, beryllium, rare earth elements and nickel. The IEA estimates Ukraine's oil reserves at more than 6.2bn bl and its gas reserves at 5.4 trillion m³, although it said Russia's annexation of Crimea means Kyiv no longer has access to "significant offshore gas resources". By Ben Winkley, John Gawthrop and James Keates Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Find out more

News

Brazil's energy transition spending drops in 2024

30/04/25

News

30/04/25

Brazil's energy transition spending drops in 2024

Sao Paulo, 30 April (Argus) — Brazil's mines and energy ministry's (MME) energy transition spending shrank by 83pc in 2024 from the prior year, while resources for fossil fuel incentives remained unchanged, according to the institute of socioeconomic studies Inesc. The MME's energy transition budget was R141,413 ($24,980) in 2024, down from R835,237 in the year prior. MME had only two energy transition-oriented projects under its umbrella last year: biofuels industry studies and renewable power incentives, which represented a combined 0.002pc of its total R7bn budget. Still, despite available resources, MME did not approve any projects for renewable power incentives. It also only used 50pc of its budget for biofuel studies, Inesc said. Even as supply from non-conventional power sources advances , most spending in Brazil's grid revamp — including enhancements to better integrate solar and wind generation — comes from charges paid by consumers through power tariffs, Inesc said. Diverging energy spending Brazil's federal government also cut its energy transition budget for 2025 by 17pc from last year and created a new energy transition program that also pushes for increased fossil fuel usage. The country's energy transition budget for 2025 is R3.64bn, down from R4.44bn in 2024. The new program — also under MME's umbrella — has a budget of around R10mn, with more than half of it destined to studies related to the oil and natural gas industry, Inesc said. A second MME program — which invests in studies in the oil, natural gas, products and biofuels sectors — has an approved budget of R53.1mn. The science and technology ministry is the only in Brazil that increased its energy transition spending for 2025, with R3.03bn approved, a near threefold hike from R800mn in 2024. Spending will focus on the domestic industry sector's energy transition, Inesc said. Despite hosting the UN Cop 30 summit in November, Brazil has constantly neglected to address the phase-out of fossil fuels, drawing the ire of climate activists . By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Mexican economy grows 0.6pc in 1Q

30/04/25

News

30/04/25

Mexican economy grows 0.6pc in 1Q

Mexico City, 30 April (Argus) — Mexico's economy expanded at an annualized rate of 0.6pc in the first quarter, with solid growth in the agriculture sector offsetting a slowdown in industry. The result came in at the high end of analyst estimates and slightly above the 0.5pc GDP growth reported by statistics agency Inegi for the fourth quarter of 2024. Still, it marks the second-slowest quarterly growth in the past 16 quarters. Most of the first quarter's GDP growth came from a 6pc expansion in the agricultural sector, which more than reversed the 4.6pc contraction recorded in the fourth quarter of 2024. The industrial sector — including mining, manufacturing and construction — shrank for a second straight quarter, contracting by 1.4pc after a 1.2pc drop in the previous quarter. Manufacturing faced tariff-related uncertainty during the quarter, though investment in the sector had already been slowing for months. The contraction was softened by manufacturers ramping up production ahead of US tariffs, with the risk of trade-driven inflation also pushing builders to contain construction costs, according to market sources. These effects are expected to fade in the second quarter and worsen in the third if high US tariffs on Mexican goods persist, said Victor Herrera, head of economic studies at finance executive association IMEF, "especially as supply chains are hit by dwindling inventories." Services expanded by an annualized 1.3pc in the first quarter, compared with a 2.1pc growth in the fourth quarter of 2024. This marks the slowest growth in services since the end of Covid-19 restrictions in early 2021. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Repsol sees Spanish refineries back to normal in a week

30/04/25

News

30/04/25

Repsol sees Spanish refineries back to normal in a week

Adds chief executive's comments and further detail on refineries Madrid, 30 April (Argus) — Repsol said it expects its five Spanish refineries to return to normal operations within a week following the nationwide power outage on Monday, 28 April. The company confirmed that power was restored to all its refineries on Monday evening, allowing the restart process to begin. It will take three days to restart the crude distillation units and 5-7 days to restart secondary conversion units, with hydrocrackers taking the longest, according to chief executive Josu Jon Imaz. A momentary and unexplained drop in power supply on the Spanish electricity grid caused power cuts across most of Spain and Portugal, disrupting petrochemical plants and airports, as well as refineries. Imaz noted that Repsol was fortunate that its refineries avoided damage from petroleum coke formation and other solidification processes during the shutdown. Repsol's 220,000 b/d Petronor refinery in Bilbao was the first to restart, thanks to electricity imports from France, he said. Petroleum reserves corporation Cores has temporarily reduced Spain's obligation to hold 92 days of oil product consumption as strategic reserves by four days, mitigating potential supply issues from the outage. Repsol's refining margin indicator, a benchmark based on European crack spreads weighted to the firm's product basket, has been recovering this week and stood at $7.5/bl this morning, compared with an average of $4.2/bl in April and $5.3/bl in the first quarter, according to Imaz. The company posted a 70¢/bl premium to the indicator in January-March on refinery optimisation and use of heavier and cheaper crudes. This was lower than the $1.20/bl premium it reported in 2024 and negatively affected by the high water content in first-quarter deliveries of heavy Mexican Maya, a staple for Repsol's more complex refineries. The high water cut in the Maya receipts shaved a potential 50¢/bl from Repsol's refining margin premium in the first quarter, and operational issues at the company's Tarragona refinery a further 20¢/bl, according to Imaz. Repsol has already completed the three major refinery maintenance projects for 2025 it flagged at its Bilbao, Tarragona and Puertollano refineries . Work on the three refineries in the first quarter cut about 40¢/bl from the firm's refining margin. The three factors point to a combined $1.10/bl shortfall in the firm's refining margin in the first quarter and were one of the reasons for the 80pc fall in adjusted profit at Repsol's refining-focused industrial division to €131mn ($149mn) in January-March from a year earlier and the 62pc fall in group profit to €366mn. By Jonathan Gleave Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

US sanctions weigh on Serbian refiner's sales

30/04/25

News

30/04/25

US sanctions weigh on Serbian refiner's sales

Budapest, 30 April (Argus) — Serbia's Russian-controlled refiner NIS faced challenges selling oil products to some of its customers in the first quarter due to US sanctions, the company said today. Runs at its 96,000 b/d Pancevo refinery rose despite these difficulties, albeit from a relatively low level a year earlier. The US announced sanctions against NIS in January because of its Russian ownership, but implementation has been postponed several times, most recently until 27 June . Even so, the threat of sanctions led NIS to reduce output at Pancevo as many customers suspended purchases, a source told Argus last month. NIS reported a 4pc year-on-year decline in oil product sales to 719,000t in January-March. Domestic wholesale and retail sales volumes fell by 16pc and 7pc to 246,000t and 203,000t, respectively. Foreign retail market sales decreased by 9pc to 34,000t, and overall motor fuel sales dropped by 8pc to 544,000t. Sales volumes fell partly because some customers terminated their contracts with NIS due to the US sanctions, the company said. Bunkering sales dropped by 25pc on the year because of difficulties in doing business with foreign clients as a result of the US restrictions, it added, without giving details. The negative effects were partially offset by a 75pc year-on-year increase in bitumen and coke turnover and a 3pc rise in jet fuel sales, NIS said, without giving volumes. Sales "through the export channel" were up by 73pc from a year earlier. NIS said it was operating in an "unstable" environment in January-March because of its "exposure to the US sanctions regime". Despite this, Pancevo increased runs of crude and semi-finished products by a third to 853,000t combined in the first quarter, although throughput was relatively low a year earlier due to a scheduled turnaround. The company said it is continuously adjusting Pancevo's slate of imported crude, based on spot market movements and procurement opportunities. NIS announced a tender to supply 2.15mn t of crude for Pancevo in April-December 2025 but cancelled the call earlier this year. By Bela Fincziczki Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more