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Hellenic shipping news
The South China Sea: Oil And Gas And An Increasingly Assertive China
in International Shipping News 17/02/2025 The South China Sea is not only vital for global trade but also holds major oil and gas reserves that are critical for the energy security of claimant states. Countries like Vietnam and Malaysia are investing in offshore drilling to meet domestic needs amidst declining onshore reserves. The militarization of artificial islands and increased Chinese aggression have aggravated tensions in the South China Sea, in turn jeopardizing the economic and energy interests of Southeast Asian nations. It will be essential to closely monitor future changes in the presence of, and hostility by, China, Southeast Asian nations, the U.S., and other interest parties. Active dialogue and cooperation among claimant states are vital for managing disputes and reducing tensions. Operational Context: Strategic Importance of the South China Sea The South China Sea (SCS) is a conduit for one-third of global trade. Disruptions to these shipping lanes could significantly impact global supply chains. Access to these waters is also particularly vital to the economic security of the countries that border it, known as claimant states. These countries all possess overlapping territorial claims in the region, and include China, Vietnam, the Philippines, Malaysia, Brunei, and Taiwan. In addition, the SCS is estimated to hold around 11 billion barrels of oil and 31.2 billion barrels of oil equivalent (BOE) in natural gas in proved and probable reserves. Around one fifth of these resources may be found in contested areas. The SCS therefore plays a key role in ensuring the energy security of claimant states. Recently, on 8 August 2024, the Chinese state-owned oil corporation CNOOC confirmed the discovery of a gas field (Lingshui 36-1) in the SCS, located southeast of Hainan Province and estimated to contain over 100 billion cubic metres of natural gas. The exploration and development of oil and gas in the SCS has been, and will likely continue to be, the centre of political tensions between claimant states. Since China’s passage of the 1992 Law on the Territorial Sea (asserting its sovereignty and claims to the waters), alongside large-scale Chinese land reclamation and artificial island building efforts from 2013, Beijing has been demonstrating its ability to project power and control in the region. This display of assertiveness has taken the form of increased deployment of military assets, militarisation of artificial islands, and the harassment of foreign vessels and offshore rigs. Moreover, China’s most recent escalation of these tactics, beginning in 2023 and intensifying in recent months, can be traced to domestic political pressures, advances in Chinese maritime and military capabilities, and increased geopolitical competition with U.S. and allies. Map illustrating Chinese territorial claims based on their “nine-dash line,” exclusive economic zones of claimant states, and disputed islands in the South China Sea (Source: UNCLOS, CIA)While China occupies the three largest artificial islands in the South China Sea, Vietnam occupies the next three largest (Source: Asia Maritime Transparency Initiative) China’s Assertive Actions and International Implications Under international law, a country is granted sovereign rights to extract natural resources from within its own exclusive economic zones (EEZ). China’s heightened activity in the SCS is directly linked to an intention of controlling and influencing the exploitation of resources, in turn complicating the energy exploration efforts of Vietnam, Malaysia, and the Philippines. To do so, China claims sovereignty over many parts of the 200 nautical mile EEZ of other claimant states to the SCS, referring to their self-proclaimed “nine-dash line” – this encompasses around 90% of the SCS. The southernmost extent of this claim reaches nearly 2000km south of China’s Hainan Island and even encroaches on waters near the Natuna Islands, which are part of Indonesia’s EEZ. However, while the line is employed by Beijing to advance its territorial claims, many countries have rejected them on the basis that they are expansive, ambiguous, and illegal under international law. A 2016 ruling of the Permanent Court of Arbitration declared the line to have no legal basis under UNCLOS. Chinese militarisation in the SCS has taken the form of continuous, low-intensity conflict. Most notably, these have included ramming, boarding, encircling, as well as blaring sirens and firing water cannons and military grade lasers at civilian ships and military vessels. These tactics fall under “grey-zone” operations– strategies that remain below the threshold of military conflict but nevertheless challenge other nations rights through intimidation, coercion, and harassment. China’s increasingly aggressive use of these tactics suggests a possible shift from strategic defence to offence within the SCS, aimed at gradually consolidating control over disputed waters. In addition, China has enhanced its military activities in the seven artificial islands in the region. Over the years, China has transformed features like the Fiery Cross Reef, Mischief Reef, and Subi Reef into fully functioning military outposts that enable the establishment of a permanent presence in the SCS. These islands have been strategically fortified with airstrips, hangers, port facilities, and long-range radars. A few notable cases provide clear insight into this issue. Satellite imagery has shown refuelling and taxi-ing of an early warning and control aircraft on the Fiery Cross Reef; on the Subi Reef: truck-like objects have been constructed with the intention to prevent foreign aircraft from landing on the island; and two catamaran missile boats capable of carrying up to eight subsonic anti-ship missiles have been observed docked by the Mischief Reef. These three Chinese artificial islands are the largest in the SCS, forming a so-called “triangular defence position” against current US bases in the Philippines. Satellite imagery of Fiery Cross Reef (which China first took possession of in 1988) from 2006 and 2022, showing the extent of militarisation of the feature. (Source: Asia Maritime Transparency Initiative) Escalating Tensions and Confrontations in the South China Sea Since 2018, Beijing’s Spratly Island outposts have received increasing military capabilities, including anti-ship cruise missiles, long range surface to air missile systems, military radar and signals intelligence capabilities, and laser and jamming equipment. The primary function of these islands is therefore associated with the expansion of Chinese offensive capabilities beyond their continental shores. China has around 20 outposts in the Paracel islands and seven in the Spratly Islands. Beijing also asserts its control over the Scarborough Shoal, located around 220km west of the Philippine Island of Luzon. China has maintained a constant guard presence there since 2013. The Shoal has been the subject of a long-running territorial dispute between the Philippines and China, and in recent months there have been several run-ins between Filipino vessels and Chinese Coast Guard (CCG) vessels in the surrounding waters. Satellite images from February 2024 also reveal a floating barrier believed to be erected by China at the entrance of the atoll. China’s recent willingness to utilise force to dominate the SCS can be illustrated through confrontations between China’s Navy, Maritime Militia, and CCG, and Filipino vessels. One incident in June 2024 involved CCG members wielding axes and a Philippine sailor losing his finger, an event seen as a sharp escalation and a clear sign of growing Chinese assertiveness in the region. In mid-September 2024, there were four confrontations between the two countries, involving collisions and dangerous manoeuvres, within the timespan of just two weeks. This surge in tensions was concentrated in the Second Thomas Shoal and the Sabina Shoal, a resource-rich atoll near the Philippine mainland. In April 2024, the Philippines Coast Guard sent the BRP TERESA MAGBANUA, one of their largest and most advanced response vessels, to Sabina Shoal. This was not done in efforts to monitor what the Philippines fear is a Chinese plan to reclaim land there, but to demonstrate Filipino intentions of exploring the area for oil and gas. In addition, the Shoal serves as the main staging ground for resupply missions to the BRP SIERRA MADRE, a World War II-era warship deliberately grounded by the Philippines in 1999 to reinforce its territorial claims at the Second Thomas Shoal. China has since denounced what it saw as the “illegal grounding” of BRP TERESA MAGBANUA, deploying several vessels to surround it. On 16 September 2024, the Philippine’s announced that it would “continuously deploy” coast guard vessels to the contested waters off the Sabina Shoal. Areas where China has previously confronted the Philippines since 2013 (Source: the New York Times)Aerial image showing Philippine coast guard vessel BRP Teresa Magbuana being surrounded near the Sabina Shoal by Chinese vessels on 1 September 2024 (Source: Philippine Coast Guard) Energy Security in the South China Sea: Oil and Gas Deposits The SCS is characterised by unclear boundaries and underexplored resources, a situation compounded by the significant costs associated with resource exploration and ongoing territorial disputes. These factors heighten the risks involved in developing and exploiting the basins in the region. Consequently, the SCS is currently underexplored, and most existing oil and gas fields are located in uncontested areas near the shorelines of claimant states. However, the possibility of discovering natural resources in these waters remains, creating incentives to secure larger parts of the SCS to meet domestic energy demands of littoral states. In particular, the Spratly Islands are believed to hold significant oil and gas reserves. According to reports, Vietnam has explored the Vanguard Bank area, and the Philippines has attempted to develop the Reed Bank. In the Paracel Islands though, partly due to a firmer Chinese presence and control, exploration activities have been less substantial. In Southeast Asia, electricity demand is set to grow rapidly in the coming decades as countries face the task of maintaining economic growth and meeting the needs of growing populations. Currently, many governments rely on liquefied natural gas (LNG) as a cost-effective bridge between their current reliance on coal and an eventual transition to renewables. Coal-fired power plants reportedly account for over 40% of the region’s power generation. In China, while growth in solar, wind, and nuclear energy has satisfied some energy demands, the growth rate of fossil fuel consumption continues to increase. Vietnam’s onshore oil and gas reserves in the Cuu Long Basin, especially the Back Ho deposit, are declining significantly. This has prompted investments in offshore drilling in the SCS. In Malaysia, several deepwater exploration projects are underway in the Sabah and Sarawak Basins of the SCS following maturity of onshore resources, whereby the most easily accessible resources have been largely extracted and are now nearing depletion or producing at reduced rates. South China Sea proved and probable oil reserves. Most conventional reserves are in uncontested areas, yet contested areas are likely underexplored. (Source: US Energy Information Administration)Current oil and natural gas basins in the South China Sea (Source: U.S. Geological Survey) Malaysian and Vietnamese Responses to Chinese Maritime Assertiveness Malaysia maintains strong economic ties with China, and maritime disputes between the two countries are typically managed through diplomatic channels. While the Director General of Malaysia’s National Security Council acknowledged that Chinese vessels had been patrolling Malaysian waters, he downplayed concerns of harassment by Chinese forces. Despite this, Petronas, Malaysia’s state-owned oil and gas company, recently awarded numerous permits to companies such as Shell and TotalEnergies to explore new deposits located more than 100 nautical miles off the Malaysian coast. CCG vessels have contested these oil and gas development efforts, particularly near the Kasawari gas field off the cost of Sarawak. Reports also indicate that Chinese military aircraft have flown as close as 60 nautical miles to the Sarawak shoreline. In a notable shift, Kuala Lumpur has become more assertive in defending its maritime rights in the face of Beijing’s attempts to hinder its resource exploration activities. Malaysia has significantly bolstered its military presence within its EEZ and has begun shadowing Chinese vessels operating in these waters. Reports from September 2024 suggest that Malaysia remains committed to continuing its activities in the SCS, despite Chinese claims that they are “infringing on its territory.” Vietnam’s attempts to develop resources in the region are often met with Chinese opposition. In 2014, the Hai Yang Shi You 981 standoff occurred when Chinese state-owned CNOOC deployed its oil platform near the Paracel islands, prompting Vietnam to intervene to prevent its establishment. Similarly, in 2017, Repsol, a Spanish multinational energy company, cancelled its planned project on the Vanguard Bank under pressure from China. This trend continued in 2018 when China opposed Vietnam’s attempts of attracting foreign investment for oil and gas exploration in the SCS. In response to these challenges, Vietnam has adopted a “tit for tat” approach, maintaining a steadfastly assertive stance against Chinese aggression. This includes active land reclamation efforts in the SCS, where Vietnam has reclaimed approximately 280 hectares of land across ten features between November 2023 and June 2024. Despite growing economic ties, concerns persist over a potential escalation in Chinese-Vietnamese relations. In March 2024, China expanded its maritime claims by establishing a new baseline that includes a portion of the Gulf of Tonkin, a shallow body of water located between northern Vietnam and southern China, as part of its internal waters. Additionally, there are fears that if Vietnam resumes its activities near the Vanguard Bank, Chinese vessels may encroach on Vietnamese territorial waters, threatening the country’s national energy strategy, “Power Development Plan 8.” Regional and International Security Frameworks The SCS is a complex nexus of geopolitical rivalries and third-party involvement. The Philippines exemplifies how domestic and foreign policy influences state behaviour in the contested waters. Since President Ferdinand Marcos Jr. took office in 2022, the Philippines has adopted a more confrontational stance against China, strengthening partnerships with the U.S. Reports from March 2024 indicate that the Philippines is also “counting on” the U.S. and its allies to support its energy exploration plans in the SCS, including inviting U.S. companies to invest in exploration and development activities. The 1951 U.S.-Philippines Mutual Defense Treaty has been frequently referenced in recent statements from both nations regarding the current security situation, stipulating mutual support in case of an attack by a third party on either country. In September 2024, both nations, along with other Asia-Pacific countries such as Australia and Japan, conducted joint maritime exercises in the SCS to enhance regional security and interoperability. Amid fears that the SCS could become a flashpoint for conflict, the U.S. frequently deploys its navy destroyers to the disputed waters through “freedom of navigation operations.” While these patrols are supposedly intended to uphold international law, they can also be seen as a signal challenging Chinese claims in the region. U.S. warships often participate in these operations, and in June 2024, a multinational patrol involving the Philippines, Japan, and Australia was conducted as part of this initiative. Beijing, however, denounces U.S. “freedom of navigation operations” within their nine-dash line, asserting that maritime disputes in the SCS, including those related to developing resources, should be resolved exclusively among the claimant states involved. China regularly conducts military drills to demonstrate its naval capabilities and readiness to counter the increasing Western military presence in the region. Most recently, on 14 October 2024, Beijing deployed warships and fighter jets to the Taiwan Strait, a narrow body of water adjacent to the SCS. Summary: The Geopolitical Landscape of the South China Sea The South China Sea (SCS) serves as a crucial throughway for global trade and merchant shipping, while also possessing significant oil and natural gas reserves. These resources are vital for claimant states, including China and many Southeast Asian countries, in meeting their growing energy needs amid depleting onshore reserves and the challenges of transitioning to renewable energy. China’s willingness to disregard international norms and project its military power in the SCS reflects a broader strategy aimed at securing as many oil and gas reserves as possible. This is evidenced by its harassment of vessels and the construction and militarisation of artificial islands. The natural resource deposits are often located near the coastlines of these nations, within their EEZ, prompting countries like Malaysia, Vietnam and the Philippines to pursue oil and gas despite increasing pressure and aggression from Beijing. China’s ongoing militarisation and assertiveness have spurred claimant states to bolster their diplomatic partnerships and engage in joint military exercises in the contested waters. This includes defence agreements, such as the one between Washington and Manila, as well as enhanced cooperation among ASEAN member states to effectively address Chinese aggression in the SCS, particularly toward Vietnam and the Philippines. However, ASEAN remains remain divided on the best approach to handle the situation, weaking the alliance’s ability to present a united front against Chinese expansionism. This division further exposes the SCS to regulatory uncertainty and heightened military tensions. Meanwhile, although U.S. presence in the region provides a counterbalance to China and is essential for maintaining freedom of navigation, its focus on Chinese expansionism is not guaranteed. American policies often shift with changing administrations and election outcomes, and it is likely that other geopolitical theatres such as the Middle East and the war in Ukraine will dominate U.S. attention in the short to medium term. Additionally, the capacity and willingness of the U.S. to counter China’s growing naval presence in the SCS are limited by insufficient manpower and resources. This inconsistent and unreliable U.S. involvement, coupled with policy gaps and current naval limitations relative to China’s, emboldens Beijing to assert greater control in the SCS region. Strategies for Regional Stability and Future Considerations China’s military superiority over its neighbours and its incremental expansionism in the SCS through intimidation and force will present significant risks if left unchecked. Despite the potential for China to steadily increase its dominance in the absence of substantial resistance from ASEAN or external powers like the U.S., experts caution against a confrontational approach, advising stakeholders to “tread lightly.” Efforts to address China’s expansionist behaviour should avoid establishing “red lines” that might provoke retaliation from Beijing. While it remains unlikely that Beijing will initiate military confrontation in the SCS, its current assertiveness is expected to continue, if not intensify. Indicators of a more aggressive Chinese strategy include deployment of anti-air and anti-ship capabilities, movement of military aircraft to the Subi, Fiery Cross, and Mischief Reefs under the guise of “military exercises” or “temporary rotations,” and increases in the frequency or intensity of coercive actions by CCG vessels. As tensions mount and the prospect of escalation of Chinese military assertiveness in the SCS heightens, it is important to explore potential responses and strategies available to affected countries and interest parties. If China escalates its actions, a combination of military, diplomatic, and economic responses is likely. These might include increased naval presence, sanctions and trade measures. Alternatively, if China maintains its current approach of gradual territorial consolidation, tensions may normalise, allowing Beijing to entrench control over contested waters. This scenario would complicate the security landscape in the region and hinder the energy exploration and development efforts of affected parties. In response, Southeast Asian nations must engage in diplomatic efforts, strengthen their defence capabilities, and pursue international legal action to safeguard their interests. Establishing a robust regional security framework within ASEAN is imperative; this framework should promote regional cohesion and active dialogue with China while also engaging with extra-regional powers. Possible actions include enhanced joint patrols, capacity building, defence modernisation, and comprehensive resource management initiatives. Looking ahead, recent discoveries of rare earth elements (REMs) in the SCS could also transform these waters into a site of geopolitical competition over maritime mineral wealth. Reports indicate that across Southeast Asia, governments are seeking to position themselves as green technology hubs and critical suppliers for the electric vehicle industry. This will likely lead to tense standoffs with Chinese vessels as countries actively seek to acquire these vital resources through deep-sea exploration efforts in the contested SCS. As with other natural resources, any developments in this area should be closely monitored. Any escalation in or shift in Chinese strategy is likely to have implications on not only claimant states but also the wider international shipping community. Source: Dryad Global, METIS Insights – February 2025, Patteraporn (Christina) Jansson (https://www.dryadglobal.com/)
port-and-ship
Feb 17, 2025
Hellenic shipping news
Hong Kong Marks Landmark Step In Green Shipping With 1St Ship-To-Ship Lng Bunkering
in International Shipping News 17/02/2025 Hong Kong on Friday completed its inaugural ship-to-ship liquefied natural gas (LNG) bunkering operation, marking a significant step for the city as it strives to develop into a high-quality green maritime fuel bunkering center. The operation was conducted by Kunlun Energy Co. Ltd., a subsidiary of China National Petroleum Corporation, which refueled a dual-fuel container ship with 2,200 tons of ultra-low-temperature LNG in Hong Kong waters, fulfilling the vessel’s entire fuel requirements for its voyage to Istanbul, Türkiye. This milestone development was made possible through both robust logistical connectivity and smooth integration of institutional mechanisms. “The bunkering ship and the liquefied natural gas it carries all come from Shenzhen, and the bunkering takes place in our Hong Kong waters. This model fully reflects the complementary advantages of Hong Kong and other ports in the Guangdong-Hong Kong-Macao Greater Bay Area,” said Mable Chan, secretary for Transport and Logistics of the Hong Kong Special Administrative Region (HKSAR) government, at the bunkering ceremony. The use of low-carbon or even net-zero carbon green marine fuels is a major trend in the international shipping industry, Chan noted, adding that the HKSAR government seized the opportunity and published the Action Plan on Green Marine Fuel Bunkering in November 2024 in response to the growing market demand for this type of fuel. Fu Bin, chairman of the Board of Kunlun Energy Co. Ltd., stated that this operation marks a significant milestone in building an international shipping hub in the Guangdong-Hong Kong-Macao Greater Bay Area and promoting the green transition of the local shipping industry. He emphasized that it also aligns with the national “dual carbon” strategy, supporting Hong Kong’s ambitions to build a green marine fuel bunkering center. Source: Xinhua
port-and-ship
Feb 17, 2025
Hellenic shipping news
Us Is Biggest Loser From Trump'S Metals Tariffs
in Commodity News 17/02/2025 U.S. President Donald Trump says trade wars are easy to win. If so, his 25% tariffs on steel and aluminium imports ought to have big overseas producers like Rio Tinto RIO, RIO begging for mercy. Yet shareholders in the $107 billion miner and rivals like BHP BHP have already shrugged off concerns. Granted, they may be overly optimistic, or reckon the levies, set to go into effect next month, won’t be imposed. But it also could be because the duties would hurt the U.S. the most. These universal tariffs would hit the major exporting countries like Canada and Mexico as well as other mining players equally. That means none would suddenly have an advantage to jostle for a larger slice of the pie. That may yet change: Trump has indicated he may grant an exemption to Australia. But it’s the source of just 1.5% of U.S. aluminium imports and a similarly de minimis amount of steel. Regardless, the U.S. will bear most of the pain. It relies on Canada for around a quarter of its steel and around 60% of its aluminium imports. The only country with the capacity to step in would be top producer China. But one of the reasons given for imposing the tariffs is to reduce the dominance of the People’s Republic – though that’s overstated. Sure, its exports of the metal last year of 110 million tonnes were double that of 2020. But only a trickle went directly to the United States. Some get there indirectly, but the vast majority went to countries that use it domestically, a senior industry insider told Breakingviews. Moreover, another rationale for the levies is to support U.S. producers. With the industry running at around 75% of capacity, steelmakers could increase output. But the short-lived bump in shares of players like Cleveland-Cliffs CLF suggests investors are sceptical. The outlook is even bleaker for aluminium: domestic players provide around 650,000 tonnes, with imports almost 10 times that. Building more smelters would be costly, take five years or more, and require a degree of certainty about long-term returns that Trump’s volatile trade policy cannot provide. It’s probably why Alcoa’s AA stock has retreated. That means the main impact of tariffs would be to make the U.S. pay more for its dependence on the same overseas suppliers. That would push up prices for everyone buying end-products from tin foil to cutlery to wind turbines to cars. As the largest consumers, Americans would be the biggest losers. Source: Reuters
port-and-ship
Feb 17, 2025
Hellenic shipping news
Us Tariffs Could Take Mexican Agricultural Products Off The Market: Usmca Former Negotiator
in Freight News 17/02/2025 Consumers and importing and exporting companies in the US, Mexico, and Canada would be quickly affected should the tariff threats that loom over the region include agricultural products, sources say. “If (the US) implements a 10-15% tariff on Mexican agricultural products, it could quickly take them off the (US) market, meaning that their prices could increase to the point where they are not sellable anymore,” Kenneth Smith, former Mexico’s chief negotiator in the talks that resulted in the approval of the USMCA said in an interview with S&P Global Commodity Insights. Data from the USDA shows that the US buys approximately 92% of Mexican agricultural exports, primarily vegetables, fruit, and spirits like tequila and mezcal in 2023. It also buys close to 60.3% of Canadian agricultural exports, which in 2023 consisted mostly of meat, grains and feeds, oilseeds, and oilseeds products. Rapeseed oil was the most imported Canadian product that year. “Close to 90% of the avocadoes, berries, tomatoes and other products that the US imports come from Mexico. (With potential tariffs), prices would go up, and the US would not have a way to replace supply with national production, especially during winter. The damage to the consumers’ pocket would be quickly felt,” said Smith. Donald Trump’s administration announced on Feb. 1 the implementation of a 25% additional tariff on imports from Canada and Mexico until both countries addressed the “extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl, (which) constitutes a national emergency under the International Emergency Economic Powers Act,” the White House said on a release. The tariffs were postponed for a month shortly after, following Mexico’s and Canada’s commitments to secure their borders with the US and the agreement of both countries to work together with the US to stop fentanyl traffic. “If the US imposes tariffs, Mexico and Canada are likely to retaliate and they could try to select products to cause ‘economic pain’ to the US,” Smith said. “Essential grains like wheat, corn, soy or rice are less likely (to be affected by retaliations), but maybe other pork meat products like Boston butts, ham, and certain primal cuts that are also produced domestically in Mexico could be affected,” he added. Feb. 1 was not the first time the US imposed tariffs on Mexican and Canadian imports. In June 2018, during the first Trump administration, the US announced 25% tariffs on steel and 10% on aluminum from both countries. Mexico and Canada retaliated with 10% and 25% tariffs on several US goods, such as pork meat, cheese, apples, potatoes, blueberries, and American bourbon. Historical data shows that Canada and Mexico were the first and third largest suppliers of agricultural products to the US from 2017 to 2021, respectively. According to the Mexican Ministry of Agriculture, avocados, tomatoes, berries, pepper, beef, and strawberries are among the products most exported to the US. Source: Platts
port-and-ship
Feb 17, 2025
Hellenic shipping news
Alternative Chinese Terminals Emerge To Take In Sanctioned Tankers, Sources Say
in Port News 17/02/2025 A handful of newer Chinese terminals recently began receiving oil tankers sanctioned by the U.S., according to five sources and shipping data, providing logistics relief after a major port operator unexpectedly banned such deliveries last month. The deliveries follow state-owned Shandong Port Group’s surprise announcement in early January that it would prohibit shipments from vessels designated by the U.S. Treasury, curbing imports at eastern Shandong province, the hub for independent refiners that are the main Chinese buyers of sanctioned Russian and Iranian crude. The recent shipments to the newer terminals are among fewer than 10 cargoes of sanctioned oil delivered into China on U.S.-designated vessels since the Shandong Port ban, a fraction of overall Chinese crude imports, based on information from traders and tanker tracking data from Vortexa Analytics and Kpler. The trade sources declined to be named due to the sensitivity of the subject. The U.S. sanctions and Shandong Port restrictions have driven up costs for Chinese refineries and stalled trade by pushing up freight rates, with costly non-sanctioned vessels joining to fill some of the shipping gap. On Tuesday, the U.S.-sanctioned Aframax-sized Si He delivered Russian ESPO Blend oil cargo into a terminal at Shandong’s Dongying port, according to Vortexa and Kpler. The Dongying terminal is smaller than nearby facilities operated by Shandong Port Group such as in Qingdao, Rizhao and Yantai, and is operated by Baogang International, or BIPC, according to Vortexa. BIPC is controlled by privately-held Shandong Wanda Holdings. BIPC did not respond to emails seeking comment. Reuters could not reach the company by phone. In mid-January, the Guyana-flagged Nichola, previously named the Spirit of Casper, a U.S.-designated vessel, delivered about one million barrels of Iranian oil trans-shipped from Malaysia into a terminal in the southern city of Huizhou, according to Vortexa and a source who deals in sanctioned oil. The berth is operated by Huaying Petrochemical, a private storage and terminal firm controlled by Shanghai-listed Wintime Energy Group Co 600157. A Wintime investor relations official said the Huaying terminal received cargoes of Malaysian or Singaporean origin, but not Iranian, adding that it conducts business under Chinese law. The official said the terminal did not register the arrival of Spirit of Casper but didn’t comment on Nichola. Iranian oil imported to China is often branded as originating from Malaysia. China is the largest buyer of Iranian oil. SANCTIONS OPPOSITION Beijing has consistently opposed unilateral U.S. sanctions, defends oil trade with Iran as legitimate, and has refrained from condemning Russia over its full-scale invasion of Ukraine. In response to Reuters’ query on the terminal deliveries, China’s foreign ministry reiterated that stance and asked the U.S. to stop disturbing or damaging normal trade between China and other nations. The January delivery was not the first time Huaying received Iranian shipments. According to Vortexa, the Huaying terminal offloaded some 7 million barrels of Iranian oil in 2023, all of which were reloaded on ships northwards to refining hub Shandong. Separately, a tank farm that opened in late 2023 at Huangzeshan island in eastern Zhejiang province received Iranian oil carried by the U.S.-sanctioned Clio in the second half of January, according to Vortexa and Kpler. Fury, another U.S.-designated vessel carrying Iranian oil, discharged at the same terminal on February 9, according to Vortexa, LSEG and Kpler. Nichola and Fury were designated on October 11. The facility is controlled by Zhejiang Energy Group, a provincial government-backed utility operator and energy trader. Calls to Zhejiang Energy went unanswered. The company did not respond to an emailed request for comment. While the BIPC terminal at Dongying is linked with an independent refinery, the Huaying and Huangzeshan terminals are designed mostly as transfer and blending hubs rather than directly serving refiners. Washington slapped its toughest-yet sanctions on the supply chain of Russian oil on Jan 10 by designating tankers that transport some 40% of Moscow’s seaborne crude exports. China is Russia’s No.2 customer of tanker-shipped oil after India. Last Thursday, the U.S. Treasury also imposed new sanctions on individuals and tankers helping to ship Iranian crude oil to China. President Donald Trump last week revived his “maximum pressure” campaign on Iran that includes efforts to drive its oil exports to zero. Source: Reuters
port-and-ship
Feb 17, 2025
Hellenic shipping news
Tankers: Vlcc Market Quite Active
in International Shipping News 17/02/2025 Clean LR2 MEG LR2’s saw an uptick in enquiry this week leading to a gentle upturn in freight levels. TC1 75kt MEG/Japan climbed 22.5 points to WS125.56 and TC20 90kt MEG/UK-Continent went from $3.3m to $3.63m. West of Suez, Mediterranean/East LR2’s of TC15 remained quiet this week and the index dropped 5% to $2.99m. LR1 LR1’s also crept upwards this week. The TC5 55kt MEG/Japan index added 8.75 points to take it to WS129.69. A voyage Westwards on TC8 65kt MEG/UK-Continent settled at the end of the week at $2.61m up from $2.5m. On the UK- Continent, the TC16 60kt ARA/West Africa index dipped from WS132.22 to WS128.06. MR MR’s in the MEG held resolute at WS190 all week which is where the TC17 35kt MEG/East Africa index is currently pegged. The Baltic TCE for the runs remains around the $16,000 /day round trip. UK-Continent MR’s crumbled this week. The TC2 index 37kt ARA/US-Atlantic coast notably had its 50-point rise of last week recorrected back down over the course of 72 hours seeing the index go from WS163.44 to bottom out at WS116.88 by close of play Wednesday. The index has since returned to WS125.63 ($10,340 /day Baltic round trip). The TC19 run of 37kt ARA/West Africa continues to pay a circa WS22.5 point premium over TC2. In the US Gulf, lack of enquiry and continued trepidation has led to TC14 38kt US-Gulf/UK-Continent sinking from WS106.43 to WS94.29. The TC18 the 38kt US Gulf/Brazil index mirrored TC14 and dropped 9.64 points to WS146.43. A Caribbean run on TC21, 38kt US-Gulf/Caribbean also lost 16% of its value to be assessed at $410,714. Handymax BCTI Handymax routes dropped in value across this week. In the Mediterranean, TC6 index lost 33.05 points to WS166.39 and up on the UK-Continent the TC23 30kt Cross UK-Continent went from WS205.28 to WS172.22. VLCC An active week in the VLCC sector has enabled charterers to drag the rates down, although there is resistance from owners which is edging the rates back up today. The 270,000 mt Middle East Gulf to China trip (TD3C) fell to mid-WS50s early in the week but has now gained a couple of points since, ultimately losing 7 points over the week to end up at WS59.40. The corresponding round-trip TCE is $37,525 per day basis the Baltic Exchange’s vessel description. In the Atlantic market, the rate for 260,000 mt West Africa/China (TD15) fell to below WS60 early in the week and has now risen to the WS62 level, a week-on-week reduction of 6 points. This gives a round voyage TCE of just over $40,000 per day. The rate for 270,000 mt US Gulf/China (TD22) lost nearly $500,000 to end the week at $8,347,500 which shows a daily round trip TCE of $41,811. Suezmax Suezmax owners have come under pressure this week, although activity in the US Gulf region has given owners a glimmer of hope. The rate for 130,000 mt Nigeria/UK Continent voyage (TD20) has been pushed down 6 points to WS88.61, meaning a daily round-trip TCE of $34,785, while the TD27 route (Guyana to UK Continent basis 130,000 mt) only lost a point to WS87.5, which translates into a daily round trip TCE of $33,856 basis discharge in Rotterdam. For the TD6 route of 135,000 mt CPC/Med, there are due to be a monster 39 cargoes in March, and the market has run with this news. The rate has been pushed up 5 points this week so far to WS104.50 (showing a daily TCE of a $41,011 round-trip). In the Middle East, the rate for the TD23 route of 140,000 mt Middle East Gulf to the Mediterranean (via the Suez Canal) dropped 2 points to WS91.22. Aframax In the North Sea, the rate for the 80,000 mt Cross-UK Continent route (TD7) remained flat at the WS107.5 level, giving a daily round-trip TCE of $25,619 basis Hound Point to Wilhelmshaven. In the Mediterranean market, the rate for 80,000 mt Cross-Mediterranean (TD19) has been pushed up again by 20 points to WS153.06 (basis Ceyhan to Lavera, that shows a daily round trip TCE of $44,666). Across the Atlantic, the market has stagnated. The 70,000 mt East Coast Mexico/US Gulf route (TD26) and the 70,000 mt Covenas/US Gulf route (TD9) has fallen 4 points to settle on Thursday at the WS113-114 level, which shows a daily round-trip TCE of about $15,000 and $16,000, respectively. The rate for the trans-Atlantic route of 70,000 mt US Gulf/UK Continent (TD25) also slumped by 4 points to WS128.61 (giving a round trip TCE basis Houston/Rotterdam of $26,814 per day). Source: Baltic Exchange
port-and-ship
Feb 17, 2025
Hellenic shipping news
Trump Approves Lng Exports, Creates Energy Council To Boost Us Oil, Gas
in Freight News 17/02/2025 U.S. President Donald Trump’s administration said on Friday it has granted a liquefied natural gas export license to the Commonwealth LNG project in Louisiana, the first approval of LNG exports after former President Joe Biden paused them early last year. The exports are approved to go to markets in Asia and Europe. Energy Secretary Chris Wright, whose agency is responsible for approving the shipments, said exporting U.S. LNG “strengthens the U.S. economy and supports American jobs while bolstering energy security around the world.” The U.S. is trying to increase its LNG exports to help reduce Europe’s dependency on Russian gas after Moscow’s invasion of Ukraine three years ago. Trump ordered a lifting of the freeze on LNG export approvals the day he came into office for a second time on January 20. Commonwealth LNG, which has waited longer than any other company for its permit, wants to build a 9.5 million metric ton per annum export plant in Louisiana to sell to countries that do not have a free trade agreement with the U.S. “Today’s actions demonstrate that President Trump is prioritizing the American energy industry and we are both pleased and grateful to have achieved these important regulatory objectives,” said Commonwealth CEO Farhad Ahrabi. The company is expecting to make a final investment decision in September 2025 as a result of the license and subject to regulatory approval. Commonwealth expects first LNG production from the project in early 2029. Two other LNG companies, Cheniere and Energy Transfer, have said they plan to move full speed ahead with their plans to export the fuel. U.S. LNG exports are expected to double before the end of the decade, based on approvals that had been granted before Biden’s pause. That has raised environmentalists’ worries about the LNG boom’s potential to boost carbon emissions, while some manufacturers and fuel-dependent industries are concerned it might spike domestic gas prices. Trump also signed an executive order in the Oval Office on Friday creating a new energy council to be led by Interior Secretary Doug Burgum, which will seek to expand U.S. output of oil and gas. The U.S. is already the world’s largest producer of those fossil fuels. The President commented on how he plans to boost drilling and said more than 600 million acres of offshore federal waters are now open to oil and gas development, after Biden had taken them off the table. Trump said he was working on getting approval for the Constitution natural gas pipeline that would bring gas from Pennsylvania’s drilling fields to New York, in order to bring down energy prices in the region. Williams Cos canceled the pipeline in 2020 following opposition from politicians and environmentalists in New York, and it is uncertain how it could be approved. Source: Reuters (Reporting by Jarrett Renshaw, Timothy Gardner, and Curtis Williams in Houston; editing by Deepa Babington and Nia Williams)
port-and-ship
Feb 17, 2025
Hellenic shipping news
Pilot Project Hull Vane And Totalenergies Big Success
in International Shipping News 17/02/2025 Hull Vane and TotalEnergies conducted a pilot project by installing a Hull Vane® on one of the company’s chartered Fast Support Vessels (FSVs) in order to reduce the CO2 emissions. Following successful sea trials, which confirmed the predicted savings in fuel consumption and CO2 emissions, and having used the Hull Vane® for several months in operation, TotalEnergies confirms the fuel saving of 11% in general. The pilot project was done on Ava J McCall, a 59m (194 ft) Fast Support Vessel owned by Seacor Marine, and designed by Incat Crowther. The vessel is in operation in West-Africa, transporting goods and personnel to the oil fields offshore Nigeria. Ava J McCall is powered by five waterjets, with a combined propulsion power of just over 10.000 kW. Hydrodynamic studies at Hull Vane showed that the Hull Vane® would save around 10% in fuel consumption at the ship’s typical operating speeds of between 15 to 25 knots. The Hull Vane®, built in the Netherlands, was shipped to Ivory Coast where it was installed during Ava J McCall’s scheduled maintenance period in late 2022. The Naval Architects of Incat Crowther USA took care of the structural integration of the Hull Vane®. The Hull Vane® is placed underneath the waterjets, and does not increase the draft, the beam or the length of the vessel. Upon completion, DP trials showed no effect on the Dynamic Positioning Capabilities of the vessel, which has DP-2 notation. Once in operation, the fuel consumption data was compared with the measurements after the last dry-docking, a year ago, to eliminate the effect of cleaning and re-painting the hull. Ava J McCall now consumes 14% less at 16 knots and 9% less at 21 knots. This is a bit higher and very close to the CFD predicted results. Over a full year, the CO2 reduction provided by the Hull Vane® on Ava J McCall amounts to 650 tons. That’s 250.000 litres of diesel less consumed per year. We are constantly looking for ways to reduce the carbon footprint of our operations, and when we found out about Hull Vane®, our interest was raised,” said David Flajolet, Marine Specialist at TotalEnergies. The pilot project we did with Hull Vane® has been a success; contrary to most of the decarbonizing systems on board vessels, Hull Vane® does not require active management from the crew and this is a key point for us. Its ability to be retrofitted for a limited cost and technical complexity make the solution a quick win for TotalEnergies. Further to the return of experience with the Ava J Mc Call, it has been decided to make it mandatory on the future Call for Tender for FSIVs in Nigeria. Niels Moerke, CEO of Hull Vane BV: “There are now six FSV’s operating with Hull Vanes worldwide, and on all of them, savings have been proven to exceed 10% over their operational profile. It has been a real pleasure to work with TotalEnergies, and we are delighted with this solid endorsement of our solution. We think that TotalEnergies is right that oil majors should take the initiative to apply Hull Vane® in the offshore market. Hull Vane® is probably the easiest way for oil majors to reduce their operational CO2 emissions without impacting their actual operation. With relative short payback periods ranging from one to three years for these kinds of vessels, it’s also a risk-free investment. We look forward to design and build the Hull Vanes for other FSVs in the fleet chartered by TotalEnergies Hull Vane BV encourages other oil majors, as well as shipbuilders and owners, to explore its technology and invites them to contact Hull Vane BV directly or through its network of sales agents. Several builders of FSVs and crewboats already offer their designs with Hull Vane® for improved efficiency. Source: Hull Vane
port-and-ship
Feb 17, 2025
Hellenic shipping news
Port Hedland In Western Australia'S Pilbara Region Reopens After Tropical Cyclone Zelia
in Port News 17/02/2025 Western Australia’s Port Hedland reopened, the port’s operator said late on Saturday, after Tropical Cyclone Zelia hit the state’s iron ore rich Pilbara region on Friday. Pilbara Ports said on its website that Port Hedland, the world’s largest iron ore hub, reopened after being shut on Wednesday due to the approach of Zelia, the most severe storm to hit the Pilbara coast since Cyclone Ilsa in April 2023. “Pilbara Ports has undertaken inspections of navigation aids, channels and berths and has confirmed safe operations can resume,” the operator said, referring to the port located about 1,301 km (808 miles) north of state capital Perth. The nearby ports of Dampier and Varanus Island, a gathering and processing hub for oil and gas, reopened late on Friday. Zelia, which crossed the coast near Port Hedland as a category five cyclone, the highest danger rating, brought with it heavy rain and wind gusts up to 290 kph (180 mph). It moved south and weakened to a category four, sparing the town’s population centre from its most destructive winds, before easing to a tropical low as it moved inland on Saturday. The nation’s weather forecaster said late on Saturday that the low was weakening in the south of the Pilbara, a region twice the size of the United Kingdom “The immediate threat of severe weather has passed,” the forecaster said on its website. Port Hedland is used by BHP Group, Fortescue and billionaire Gina Rinehart’s Hancock Prospecting. The Dampier and Cape Lambert ports ship iron ore from Rio Tinto, which expected ship movements to resume on Saturday afternoon. Fortescue said on Saturday it was assessing its operational sites such as roads, villages and mines but advised that the cyclone had done minimal damage. BHP, which on Thursday paused its Port Hedland operations for safety, said on Saturday that the cyclone had not caused any major damage at its sites. Source: Reuters
port-and-ship
Feb 17, 2025
Hellenic shipping news
Successful Field Trial Of The "Infralaser" Rust And Coating Removal System On An Actual Vessel-Aiming For Environmental Load Reduction
in International Shipping News 17/02/2025 Mitsui O.S.K. Lines, Ltd., MOL Drybulk Ltd., Furukawa Electric Co., Ltd. and TSUNEISHI SHIPBUILDING Co., Ltd. conducted a successful field trial of the “InfraLaser” system on the outer hull of an actual vessel in December 2024. Furukawa Electric, with the cooperation of MOL and MOL Drybulk, has been developing a rust and coating removal system for onboard maintenance since 2021, utilizing the surface treatment solution “InfraLaser” based on technology cultivated in industrial lasers. Additionally, since 2022, Furukawa Electric and TSUNEISHI SHIPBUILDING have been conducting demonstration experiments aimed at the development of the same system for ship repairs. Background During ship repairs, rust and coatings are removed for hull inspection and repainting. However, the current sandblasting method, which removes rust and coatings by blasting abrasive materials against the surface, scatters waste materials and removed paint as debris, necessitating recovery efforts. By replacing this with a laser blasting method that generates minimal waste, dust, and noise, we expect to reduce environmental impact and improve occupational health. MOL and MOL Drybulk have expressed their support for this development and have participated in the activities. Additionally, MOL Group and TSUNEISHI SHIPBUILDING, recognizing the potential of utilizing “InfraLaser” for ship repairs and committed to reducing environmental impact and enhancing occupational health for sustainable business operations, initiated discussions on collaborative creation and development of a laser blasting system for ship maintenance and repairs. Details By applying the metal processing (welding, cutting, surface treatment, etc.) technology that Furukawa Electric has cultivated over many years in industrial laser to the optimization of irradiation conditions for rust and paint removal in the undercoating of ships, we aim to develop a system that minimizes the impact on the object and reduces the environmental burden. In the field trial, TSUNEISHI SHIPBUILDING provided feedback for use in shipbuilding and ship repair, and MOL and MOL Drybulk provided development support and feedback as ship operators and managers. These will be reflected in the development of the “InfraLaser” system and optimized into a shape and specifications suitable for use in real environment. As the first effort by the four companies, the field trial was conducted in December 2024 on a ship operated by MOL (the outer hull’s paint: manufactured by Kansai Paint Marine), confirming the effectiveness of the laser application of the system under development to the outer hull. Moving forward, we will accelerate the development of an innovative laser application system for ship repair that can replace the conventional sandblasting method for rust and paint removal and coating of ships. We will also continue to study the automation of the system by taking advantage of the laser’s zero reaction force (Note), aiming to labor saving and automate the ship maintenance and repair process. MOL Group’s Sustainability Management The MOL Group’s sustainability management is based on a long-term strategy to achieve sustainable growth for society and the Group. The Group’s vision is “We will develop a variety of social infrastructure businesses in addition to traditional shipping businesses, and will meet the evolving social needs including environmental conservation, with innovative technology and services. MOL group aims to be a strong and resilient corporate group that provides new value to all stakeholders and grows globally.” To achieve this goal, MOL is working on the Group management plan “BLUE ACTION 2035” and the “Environmental Vision 2.2” for the environment. We are committed to maximizing the value we provide to all stakeholders by implementing BLUE ACTION 2035 in accordance with our corporate mission and values, “MOL CHARTS,” while addressing the materiality of “Sustainability Issues.” https://www.mol.co.jp/en/sustainability/management/ Furukawa Electric Group’s approach to the SDGs Considering the United Nations’ Sustainable Development Goals (SDGs), the Furukawa Electric Group has established the Furukawa Electric Group Vision 2030, with the year 2030 as its target. This initiative aims to “establish a social infrastructure that integrates information, energy, and mobility to safeguard the global environment and facilitate safe, secure, and comfortable living.” We are currently working towards this objective. To achieve our Vision 2030, we will contribute to the achievement of the SDGs by promoting Open, Agile, and Innovative ESG management that aims to enhance our corporate value over the medium to long term. Source: Mitsui O.S.K. Lines
port-and-ship
Feb 17, 2025
Hellenic shipping news
China'S January, February Iron Ore Imports To Slide As Cyclones Hit Australian Supply
in Dry Bulk Market,Freight News 17/02/2025 Iron ore imports to top consumer China for the first two months of 2025 are set to slide as weeks of tropical cyclones and bad weather in major producer Australia hit shipments, according to analysts. Imports of the key steelmaking ingredient in January and February are forecast to be at least 10% less than the 209.45 million metric tons notched over the same period last year, analysts said. Ship tracking service Kpler sees Chinese iron ore imports for January and February at 191.7 million tons, down 10.4% year-on-year. Cyclones and bad weather mean shipments from Australia, the source of almost two-thirds of China’s iron ore, are forecast to drop by 8 million tons-20 million tons in the first two months of 2025. “Since it’s a cyclone at category five, mining area activities, port infrastructures and marine transport might all be affected, so the actual impact might be higher than the current estimate,” said Pei Hao, senior analyst at international brokerage Freight Investor Services (FIS). Official import data for January and February will be published on March 7. China combines the data for the two months into one release to smooth out the impact of the Lunar New Year holidays. Rio Tinto RIO said last month it expects its first-quarter shipments to be impacted by heavy rainfall following cyclone Sean and that it would update the market at its results. That was before the latest tropical cyclone Zelia forced the miner to suspend port operations this week. Zelia made landfall on Australia’s west coast on Friday. BHP BHP and Fortescue FMG have paused their Port Hedland operations for safety. Fortescue said it had also closed its Iron Bridge mining operations and canceled non-essential travel to the Pilbara sites. Rio Tinto said it had cleared its Cape Lambert and Dampier port operations and there were no longer any ships or trains operating at its ports. Fears of supply disruptions have helped stem falling prices caused by U.S. President Donald Trump’s new tariff threat. But the upside room for ore prices is limited with a ceiling at around $115 a ton, as Trump’s new tariffs are expected to cast some shadow on demand, FIS’ Pei said. Source: Reuters
port-and-ship
Feb 17, 2025
Hellenic shipping news
Asian Spot Lng Gains Amid Colder Weather, Europe Stocks Concerns
in General Energy News 17/02/2025 Asian spot liquefied natural gas (LNG) prices rose to an over-one-year high this week, amid forecasts of colder temperatures and as concerns of Europe’s storage levels persist. The average LNG price for March delivery into northeast Asia (LNG-AS) was at $16.10 per million British thermal units (mmBtu), the highest since November 2023, industry sources estimated. “The main market concern is the high rate of withdrawals from Europe’s gas inventories… The region appears on track to import 11 million tons of LNG in February,” said Siamak Adibi, director for gas and LNG supply analytics at FGE. “Europe will certainly need higher LNG imports this year to address higher gas consumption and lower gas inventories. If Asian demand strengthens, market tightness could have a greater impact on spot prices.” Asian prices were also supported as the market needs to remain competitive and keep itself priced into some spot volumes, for a baseline level of LNG to flow into Asia, said Martin Senior, head of LNG pricing at Argus. Several LNG cargoes were diverted from Asia to Europe, on higher European prices and weaker Asian demand. Additionally, Tokyo and Seoul are both forecast for cold snaps towards the end of the month, though this is set to be followed by a reversion to seasonal average temperatures by the end of the month, said Argus’ Senior. In Europe, gas prices eased from two-year highs on forecasts of warmer temperatures, ongoing U.S. efforts to end the war in Ukraine and talks of less rigid gas storage targets. Still, market uncertainties remain as Europe’s inventories have dropped to around 47%, with still some winter months to come, said Hans Van Cleef, chief energy economist at PZ-Energy. “Risks of a further or even faster depletion of inventories will continue to build on the already negative sentiment in the markets.” S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in March on an ex-ship (DES) basis at $15.137/mmBtu on February 13, a $0.55/mmBtu discount to the March gas price at the Dutch TTF hub. Argus assessed the price at $15.11/mmBtu, while Spark Commodities assessed it at $15.097/mmBtu. The U.S. arbitrage to north-east Asia via the Cape of Good Hope for February narrowed for a third straight week, but is still signalling that U.S. cargoes are incentivised to deliver to Europe over Asia, said Spark Commodities analyst Qasim Afghan. On LNG freight, Atlantic rates rose to $5,000/day on Friday, marginally recovering from record lows seen in the last two weeks, added Afghan. Pacific rates remained steady at $10,000/day. Source: Reuters
port-and-ship
Feb 17, 2025