Category: Nieuws

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U.S. sanctions on Rosneft Trading seen shifting crude flows

U.S. sanctions on Russian Rosneft’s trading arm will disrupt a slice of global crude flows and may prompt refineries in Europe, India and the United States to shift purchases to other crude suppliers, traders said.

The United States on Tuesday redoubled efforts to oust Venezuelan President Nicolas Maduro by barring U.S. dealings with Rosneft Trading S.A., a subsidiary of Russia’s state oil major Rosneft, which Washington said provides him a financial lifeline. Russia has called the sanctions illegal and said it plans to consider options in reaction.

The ban will likely hit some U.S. direct purchases of Urals, typically a medium sour blend, from Rosneft Trading and could make it more difficult for refiners in Asia and Europe to buy from the firm. Washington advised non-U.S. firms to seek guidance should they be unable to wind down dealings with the trading firm within 90 days.

European refiners could look to source replacement crudes from West Africa, Brazil and the U.S. Gulf Coast, if Urals become expensive, traders said. Urals is the most common export grade from Russia and a benchmark for medium sour crudes in Europe. It could create new demand or support prices for alternatives such as Colombia’s Vasconia and Castilla and Basrah heavy, they said.

Phillips 66 has been one of the biggest buyers of Urals on the Gulf Coast from suppliers including Rosneft Oil, according to U.S. Customs data on Refinitiv Eikon. Companies that have imported Urals from Rosneft Trading in recent years included PBF Energy and Swiss trader Trafigura .

Phillips 66’s imports through the U.S. Gulf Coast and some Italian refiners in Trieste are likely to be affected, one market source said.

Phillips 66 and PBF Energy spokespeople declined to comment. A spokeswoman for Trafigura said it would comply with the sanctions.

U.S. crude flows to Europe are set to increase as demand from Asia has plummeted due to the coronavirus outbreak, sources said.

In India, refiner Reliance Industries said it was assessing the impact of the sanction. Nayara Energy, part-owned by Rosneft, said it complies with all relevant and applicable U.S. sanctions.

The sanctions do not target other Russian traders including Litasco, an arm of Lukoil. But past sanctions have tended to prompt some companies to do more than required. Traders on Wednesday said Rosneft’s oil sales, excluding the trading arm, were not affected.

Rosneft Trading acts as a counterparty on behalf of Rosneft in some global deals and plays a role in an informal oil trading alliance Rosneft has with Trafigura, traders said. It is unclear what impact the sanctions will have on that alliance.

Reporter: Devika Krishna Kumar from Reuters

Oil Trading Giant Sees Oil Price Recovery Later This Year

Commodity trading major Vitol said it expected oil prices to recover later this year once the effect of the coronavirus epidemic wanes, Bloomberg reported, citing the company’s chief executive.

Before that, however, the oil market will suffer a 200-million-barrel negative impact on demand during the first quarter, Russell Hardy said, with loss of demand in China at 4 million bpd at the moment, on the back of travel bans and lower economic activity.

While this is undoubtedly negative for prices, Vitol’s CEO also said there is a positive effect to counter the impact of the coronavirus, and this is lower production in Libya and Venezuela, along with OPEC plans to deepen their production cuts.

“All of those factors are going to help re-balance the 200 million barrels, which will leave the market in a better position for the second half of the year,” Hardy told Bloomberg in an interview. “There’s an OPEC meeting to come in a couple of weeks time and the market’s anticipating some kind of supply response from OPEC.”

OPEC officials earlier this month recommended additional cuts of 600,000 bpd to prop up oil prices, but Russia has been reluctant to agree, asking for more time to consult on the recommendation.

This opposition is hardly surprising: Russia has consistently budgeted for lower oil prices than the actual ones since the 2014 price collapse, and as a result is much more resilient to price drops than Saudi Arabia. It has also signaled repeatedly it is making a compromise with its oil industry in supporting the cuts as they are.

The next meeting of OPEC and its partners in the cuts is scheduled for early March and if history is any indication, Moscow will agree to an extension or deepening of the cuts, but it may not stick to them.

Meanwhile, the EIA, the IEA, and OPEC itself have revised down their global oil demand outlooks, with the EIA the most pessimistic, expecting demand to take a hit of 378,000 bpd for this year. OPEC revised down its outlook by 230,000 bpd earlier this month, while the IEA’s downward revision was for 365,000 bpd.

Reporter: Irina Slav from Oilprice.com (21 February 2020)

JPMorgan Warns It Might Get Walloped by the Climate Crisis

JPMorgan Chase & Co, long a target of public scrutiny for its relationship with the fossil-fuel industry, is getting more serious about the impacts of the climate crisis.

The bank’s annual regulatory report on Tuesday added “climate change” as a risk factor, saying it could hurt operations and customers. Risks including prolonged droughts or flooding, increased frequency of wildfires, rising sea levels and altered rainfall could “prompt changes in regulations or consumer preferences, which in turn could have negative consequences for the business models of JPMorgan Chase’s clients,” the company wrote in the filing.

The added disclosure came a day after JPMorgan vowed to stop financing coal-fired power plants unless they’re using technology to capture and sequester carbon. The bank also won’t provide project financing for new oil and gas developments in the Arctic.

The climate crisis and its potential impact on society, markets and the global economy is gaining more attention from the business community. This month, Goldman Sachs Group Inc., Bank of America Corp. and Citigroup Inc. also added to their regulatory filings stronger warnings about the toll it could take on their businesses.

Environmental activists have been pressuring JPMorgan, the biggest U.S. bank, to divest from the fossil-fuel industry, and have called on shareholders to remove Lee Raymond, the longtime climate skeptic who previously ran Exxon Mobil Corp., from the lender’s board.

Chief Executive Officer Jamie Dimon, another target of environmentalists, has said climate change can be solved only through government policies.

“I’ve always thought it was a problem,” Dimon said at the bank’s investor day Tuesday. “We should acknowledge the problem and start working on it.”

Financial firms often include dozens of disclaimers about potential risks in their annual 10-K filings, but JPMorgan has typically focused on those more directly related to the economy, regulation and competition. Economists at the firm have been warning clients about the potential for climate change to threaten the global economy and even the human race.

Reporter: Michelle F. Davis by Bloomberg (26 February 2020)

Navigating uncertainty – IMO 2020

In the wake of IMO 2020, the Chinese New Year and the coronavirus, the more than usual uncertainty has generated rough sailing throughout all sectors of shipping.

IMO 2020 seems to have vanished from the news but was the first topic covered Capitallink organised a webinar showcasing the “navigation” strategies of four listed companies- with participation by company ceos, moderated by Jefferies equity analyst Randy Giveans.

Panel participant Kim Ullman, the ceo of Concordia Maritime, noted “the industry said that they would fix it…and they have.” He said that price spreads between low sulphur and high sulphur were actually lower than many industry participants had expected – presently in the range of $150 – $175 per tonne, depending on geography.

On the cargo demand side, he added that there had been an uptick in oil cargoes moving “out to the East” to be refined in line with expectations of market participants.

Panelist Valentios “Eddie” Valentis, the top man at Pyxis Tankers, explained that, in 2019 Q4, movements of low sulphur fuel cargoes helped fuel the hires for MR tankers up to levels as high as $35k per day. He explained further that delays as supply organized bunker stocks brought about some delays- all sorted out now, which also contributed to the Q4 strength.

“Things are settling down,” he said, explaining that Pyxis, operating five smaller tankers, had not experienced any difficulties with arranging for low sulphur fuel supplies, in various ports.

Dry bulk webinar participant, Stamatis Tsantanis, the chairman/ ceo of capesize owner Seanergy Maritime, offered a similar view, noting that, for Seanergy vessels not equipped with scrubbers, “we have found that the supply of low sulphur fuel is abundant.”

The contraction of the price spreads have impacted the firms in different ways. Tsantanis described arrangements where his company’s scrubber fitted vessels had been entered into three – five year deals with major charterers. In these schemes, the charterers paid the capital costs, installation and offhires for scrubber retrofits; Tsantanis described a “profit sharing plan” where the repayment to the time charterer comes from fuel savings. The shipowner participates in the sharing if the spread widens.

Concordia Maritime’s Ullman acknowledged that his firm, where the vessels are consuming low sulphur fuel, had entered into forward hedges to protect against increases in the price differential, at the time that a decision was taken not to invest in scrubbers. He told the webinar listeners: “The prices today are lower than the hedge, but fleet enjoying lower MGO prices.”

Looking towards the future, beyond IMO2020, Panelist Marco Fiori, the ceo of Premuda, said “There are a lot of question marks…it’s very difficult to operate longer term in a capital intensive industry,” when there are such great uncertainties about future fuels suitability. The silver lining in all this is that fuel uncertainties “have not been very encouraging for ordering”.

Reporter: Barry Parker from Seatrade Maritime News (24 February 2020)

ARA Oil Products Stock Levels Fall

13 February, 2020 (Argus) — The total volume of oil products held independently in storage in the Amsterdam-Rotterdam-Antwerp (ARA) area fell by around 1pc during the week to yesterday, according to the latest data from consultancy Insights Global.

ARA stocks fell in the week to 12 February, down from a week earlier. The small fall resulted from draws on gasoil, naphtha and jet fuel inventories.

Gasoil inventories fell in the week to 12 February, partly as a result of firm barge flows up the river Rhine but also because of demand for middle distillate cargoes in western France that drew in tankers from the ARA area. Refining in the country has been impacted by industrial action in the country since December, prompting a rise in barge flows to Strasbourg and unusual tanker bookings from the ARA hub to west coast destinations. There are currently [no loading restrictions] affecting barges along the river Rhine, a factor that further supported outflows from the ARA area. Cargoes departed for the UK as well as France, and arrived from Russia, Poland and the US.

Naphtha stocks in the ARA fell, the lowest level recorded since October. No naphtha cargoes departed the hub, while cargoes entered from Poland and the UK. Naphtha demand from petrochemical end-users in the ARA area and along the Rhine was steady at the firm levels recorded in recent week, and low naphtha supply in the key Mediterranean supply source has limited volumes available to northwest European buyers.

Jet kerosine inventories dropped on the week to their lowest since March 2015 amid tight supply around the continent. Refinery outages in the Mediterranean and low imports have combined to reduce the volume of available supply in northwest Europe. No tankers arrived in the ARA area and at least one tanker departed for the UK.

Gasoline stocks rose, amid persistently low exports to key arbitrage region the US. High inventories in the US Atlantic and Gulf coasts made the transatlantic arbitrage route from northwest Europe unviable during the opening five weeks of 2020, but a single tanker did depart the ARA area for the US during the week to yesterday and the route appears viable on paper. A tanker also departed for Argentina, probably carrying summer-grade gasoline, as well as to the Mideast Gulf, the Caribbean and west Africa. Tankers arrived from Norway, Spain and the UK.

Fuel oil inventories were broadly unchanged on the week. The volume arriving from Russian fell on the week, while tankers arrived from the Baltics and the UK. Tankers departed for west Africa but not for Singapore.

Reporter: Thomas Warner

ARA Oil Products Stock Levels Rise

6 February, 2020 (Argus) — The total volume of oil products held independently in storage in the Amsterdam-Rotterdam-Antwerp (ARA) area rose during the week to yesterday, according to the latest data from consultancy Insights Global.

Overall ARA stocks reached a small rise the week to 6 February. The small rise was driven by gains in gasoline and fuel oil inventories, which both recorded double-digit increases.

Fuel oil inventories rose during the week. Inflows into ARA came from France, Poland, Russia and the UK. The cargo from Poland was IMO-compliant low sulphur fuel oil, and the cargoes from Russia arrived in Aframax tankers. Russia typically exports high-sulphur fuel oil, demand for which has been curbed by the IMO 2020 global marine fuel sulphur cap. Fuel oil tankers departed ARA for the Mediterranean area this week, which could result in onward shipments east of Suez.

Gasoline stocks rose, amid low exports. The arbitrage route to the US remained closed throughout the reporting period, owing to high inventories across the Atlantic. Tankers did depart for the Caribbean and west Africa, and to the Mideast Gulf. Some mild barge congestion was heard around the Amsterdam area, causing some loading and discharge delays. Tankers arrived from France, Spain and Sweden.

Stocks of all other surveyed products fell. Gasoil inventories fell in the week to 6 February, largely as a result of a week on week rise in barge flows up the river Rhine. The increase in the volume heading inland was prompted by the lifting of loading restrictions that had been in place because of low water levels. The incoming volume was low amid weak demand in northwest Europe, where unseasonally high temperatures continue to weigh on heating oil demand. Tankers arrived from the Baltics and Russia, and departed for France and the Mediterranean.

Naphtha stocks in the ARA fell, according to Insights Global. No naphtha cargoes departed the trading hub, while cargoes entered from Norway and Russia. Naphtha demand has strengthened from the petrochemical sector and barge flows to inland destinations were higher on the week. And independently-held inventories of jet kerosine fell on the week. No jet cargoes were delivered to the area, and tankers departed for the UK.

Reporter: Thomas Warner

ARA Oil Products Stocks Fall Back

24 January, 2020 (Argus) — The total volume of oil products held independently in storage in the Amsterdam-Rotterdam-Antwerp (ARA) area fell on the week after reaching their highest since 19 September a week earlier, according to the latest data from consultancy Insights Global.

Gasoline inventories fell on the week. Demand from the US remained low with US Gulf Coast inventories at record highs. Tankers did depart for west Africa, Puerto Rico, Brazil and the Mediterranean. Some of the gasoline heading for the Mediterranean may travel on to the Mideast Gulf, where supply is tightening ahead of scheduled refinery turnarounds.

Gasoil inventories fell to reach their lowest level in over a month. Cargoes arrived from the US, the UK, Norway and France. Tankers departed the area for Germany and the UK. A fall in diesel margins over the past few weeks may have prompted run cuts in the area, leading to a draw on existing volumes.

Fuel oil stocks fell to reach three-week lows. A single cargo arrived in the area, from Denmark. Tankers departed for Spain, Greece, the UK and France. Jet kerosine inventories also fell heavily, dropping by around 8pc on the week to reach their lowest level since January 2017. No tankers arrived in the ARA area and cargoes departed for the UK.

Naphtha inventories fell to reach five-week lows. Tankers arrived from France and Russia and none departed. Demand from petrochemical buyers along the river Rhine rose week on week, as end-users refilled their storage units following a period of end of year destocking during December.

Reporter: Thomas Waner

Norway’s electric cars zip to new record: almost a third of all sales

OSLO (Reuters) – Almost a third of new cars sold in Norway last year were pure electric, a new world record as the country strives to end sales of fossil-fueled vehicles by 2025.

In a bid to cut carbon emissions and air pollution, Norway exempts battery-driven cars from most taxes and offers benefits such as free parking and charging points to hasten a shift from diesel and petrol engines.

The independent Norwegian Road Federation (NRF) said on Wednesday that electric cars rose to 31.2 percent of all sales last year, from 20.8 percent in 2017 and just 5.5 percent in 2013, while sales of petrol and diesel cars plunged.

“It was a small step closer to the 2025 goal,” by which time Norway’s parliament wants all new cars to be emissions-free, Oeyvind Solberg Thorsen, head of the NRF, told a conference.

Still, he cautioned that there was a long way to go since two-thirds of almost 148,000 cars sold in 2018 in Norway were powered by fossil fuel or were hybrids, which have both battery power and an internal combustion engine.

The sales figures consolidate Norway’s global lead in electric car sales per capita, part of an attempt by Western Europe’s biggest producer of oil and gas to transform to a greener economy.

The International Energy Agency (IEA), using a slightly different yardstick for electric vehicles that includes hybrids that can be plugged in, showed Norway’s share of such cars at 39 percent in 2017, far ahead of second-placed Iceland on 12 percent and Sweden on six percent.

By contrast, such electric cars had a 2.2 percent share in China in 2017 and 1.2 percent in the United States, IEA data show.

Erik Andresen, head of Norway’s car importers’ federation, said the boom for electric cars was denting Norway’s tax revenues, raising questions about future reforms to raise cash from the 5.3 million population.

Overall, new car sales in Norway fell 6.8 percent in 2018 to 147,929 vehicles, breaking a rising trend in recent years, NRF data showed.

Nissan’s upgraded Leaf electric car was the top-selling car in Norway last year, while other top-selling cars overall ranged from small BMWs and Volkswagens to full-size sedans and electric sport utility vehicles by Tesla.

Sales of pure electric cars surged 40 percent to 46,092 in 2018 while sales of diesel models fell 28 percent, petrol cars were down 17 percent and hybrids that cannot be plugged in fell 20 percent.

The Institute of Transport Economics (ITE), a consultancy, doubted that the 2025 goal for emissions-free new cars could be reached.

“Strictly speaking I don’t think it’s possible, primarily because too many people don’t have a private parking space and won’t want to buy a plug-in car if they can’t establish a charging point at home,” ITE economist Lasse Fridstroem said.

“We may be able to get to a 75 percent (market share), provided that the tax breaks are maintained,” he added.

The Norwegian Electric Vehicle Association (NEVA), a lobby group, predicted a 100 percent market share was feasible.

“We know that charging access is a real barrier … and there’s also a risk that not enough cars become available,” NEVA head Christina Bu said, adding that some customers must wait for a year or more before their electric vehicle is delivered.

Reporting by Alister Doyle, editing by Terje Solsvik/Adrian Croft/Susan Fenton

Rhine Gasoil Barge Flows Grew more than 35%

In 2019, more than 10M tonnes of gasoil was transported up the Rhine to German, French and Swiss destinations. The average volume transported by barge up the Rhine on a weekly base was 201K tonnes. The highest volume was 265K tonnes in mid-February. As can be seen from figure 1 the trend during the year is a modest decrease in transported volumes.

Figure 1: Quarterly Barge Gasoil Flows to Hinterland (c) Insights Global

Quarter 1 of last year showed the highest barge export numbers compared to the other quarters. Healthy demand for heating oil during the winter supports higher transports flows. The minimum week volume (138K tonnes) was realized during Christmas when market participants were not active. End-of-year obligations depress volumes in quarter four of

2018 shows a similar pattern with the highest volumes of gasoil barge transports in the first quarter of the year and the lowest volumes in the last quarter. However the trend is more extreme and when we compare the total volume of gasoil that has been exported up the Rhine by barge we see an enormous difference in volume.

In 2018, some 7.6M tonnes was exported. The main reason for the low volume in 2018 were the extremely low Rhine water levels, especially in quarter 3 and 4. During this water level regime barge freight rates spiked to record highs. The average weekly volume in 2018 was 148K tonnes, while the high was recorded in March at 266K tonnes and the low was recorded in October at 85K tonnes.

As can be seen from figure 2, most of the gasoil that was transported by barge upstream went to Germany, followed by Switzerland and France. This clearly emphasizes the importance of the river Rhine for the German oil market.

Figure 2: ex ARA destinations for Gasoil per country

For more information on oil product barge flows, check out our Rhine Flow Service Report or request a trial by filling in form below.




    Ship Fuel, Once a Pariah Product, Now Costs More Than Car Fuel

    1. Bunkers now more expensive than other fuels in barrel terms
    2. IMO 2020 rules have triggered demand for low-sulfur product

    (Bloomberg) Once considered the pungent sludge left over after refineries made things like gasoline and diesel, fuel for ships has suddenly become the oil industry’s must-make product.

    The prices of so-called bunkers in Europe have surged this year to such an extent that they’re more expensive than diesel, gasoline and jet fuel — at least in barrel terms, the unit that refineries use to calculate their processing margins.

    The reason for the rally is because the fuel in question just fundamentally changed. On Jan. 1, it became mandatory for most of the world’s merchant fleet to consume fuel containing no more than 0.5% sulfur. Until Dec. 31, a 3.5% upper limit existed in most parts of the world.

    The upgrade — to improve human health and combat environmental concerns — has radically altered economics for refineries in many parts of the world. Some can churn out the new product, others are likely having a tougher time.

    To be clear, at an industrial level, the products in question often trade in and are shipped in metric tons. And on a price-per-ton basis, shipping fuel remains the cheapest of the four products in northwest Europe, despite surging in recent weeks. That’s because it’s much denser than those other products.

    Supply of the new shipping fuel is going through a few teething problems. It’s often made in slightly different ways than the old type. Some testing companies are finding fault with early batches of the new product, even if the full scale of those issues remains unclear.

    By Jack Wittels with assistance by Alaric Nightingale