Please find below the [xclusiv] latest Weekly S&P Report, along with following opening market commentary

[xclusiv] 2025_03_24 

Market Commentary:

Recent geopolitical developments involving the United States, Iran, Yemen, and China continue to create significant implications for the global shipping industry, influencing freight costs, risk premiums, and trade flows.

Firstly, the renewed U.S. sanctions targeting Chinese refiners and vessels involved in Iranian oil transportation represent a tightening of existing restrictions, directly impacting crude oil shipping costs and operations. The sanctions specifically effecting entities like Shouguang Luqing Petrochemical highlight a clear escalation aimed at curbing Iranian oil exports, particularly to China. Given that Iranian crude constitutes over 10% of China’s oil imports, the sanctions could initially lead to reduced shipments, increased freight costs, and heightened operational complexity. Traders already report freight rates for VLCCs from transshipment points near Malaysia to Chinese ports in Shandong have more than doubled to around $3-$4 per barrel. However, despite these elevated costs and disruptions, traders anticipate that Chinese refiners will adopt new business structures and payment methods, thus maintaining a steady, albeit potentially reduced, flow of Iranian oil. China’s diplomatic stance, opposing unilateral sanctions and affirming trade with Iran as legitimate, may further embolden Chinese entities to circumvent sanctions.

Secondly, rising instability in the Red Sea region due to U.S. airstrikes on Yemen, aimed at deterring attacks by the Iran-aligned Houthis, has increased war risk premiums significantly. The Houthis’ threat to target vessels linked to the U.S. and Israel has already escalated shipping insurance costs. After a brief easing earlier this year, risk premiums surged again, with rates now reaching as high as 2% of a ships value for vessels willing to navigate these waters. The Houthis’ explicit threats and past attacks, including sinking vessels and killing seafarers, exacerbate uncertainty, prompting insurers and ship operators to reassess risks carefully. Consequently, this volatility directly translates into substantial additional operational costs, potentially redirecting routes or reducing traffic through critical maritime corridors like the Red Sea, affecting global supply chains.

Finally, Iran’s Supreme Leader Ayatollah Ali Khamenei’s recent statements distancing Iran from direct responsibility for actions by regional groups, including the Houthis, add another layer of complexity. Although the U.S. explicitly links Iran with Houthi aggression, Khamenei insists these groups operate based on independent motivations. Regardless of Tehran’s stated position, Washington’s approach ensures sustained tension and potential further military action in the region. The ongoing geopolitical friction reinforces existing security concerns among shipping companies, prompting them to factor in heightened risks into long-term strategic planning.

Together, these developments indicate a period of increased operational costs, elevated insurance premiums, and significant route disruptions within key maritime trading lanes. While traders and shipping companies have historically found mechanisms to adapt to sanctions and security threats, the combined pressures from escalating geopolitical tensions involving Iran, Yemen, and key international actors like the U.S. and China mean that the shipping industry must brace for sustained volatility, increased costs, and a persistent need for strategic flexibility in navigating complex international waters.

Sale and Purchase

Dry:

It was a very active week, with 16 vessels finding new owners. On the Capesize sector, the “Bulk Providence” – 180K/2011 STX was sold for USD 28 mills to Chinese buyers, while the 2-year-older “Braverus”- 171K/2009 Sungdong found new owners for USD 22 mills. On the Supramax “IVS Gleneagles” – 58K/2016 Shin Kurushima changed hands for USD 23 mills, while the Scrubber fitted “CS Sonoma”- 57K/2010 Jiangsu Hantong was sold for USD 11.3 mills to South East Asian buyers, while the “Jin Shun” – 53K/2007 Shanghai Shipyard was sold for USD 8.26 mills to clients of Yuhe Shipping basis delivery end April/May 2025. Last but not least, the Handysize “Izanagi Harmony”- 37K/2021 Saiki changed hands for high USD 24 mills, whilst the 5-year-older OHBS “Atlantic Brave” – 33K/2016 Shin Kurushima was sold for USD 17.8 mills basis forward delivery with 15th October cancelling.

Wet:

The tanker S&P activity was subdued this week, with only 2 sales to report. The MR2 “Eden” – 50K/2020 HMD was sold for excess USD 40 mills to clients of Ditas Shipping. On the Small Tanker/Chemical sector, Chinese buyers acquired the Scrubber fitted, stainless steel “Songa Winds” – 20K/2009 Fukuoka for USD 20.5 mills.