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Russian Price Cap and Recent Cargo Flows

Aug. 25, 2023

The Russian price cap has always had two objectives: reducing Russia's revenues from oil exports and ensuring that oil continues to flow to global markets. If Western maritime services are used, attestations must be kept showing Russian oil was bought under US $60.  In July, Russia’s leading Urals-grade crude began trading at above $60 a barrel—above the cap the Group of Seven economies set for Russian oil last December to allow Russia to continue selling and keep global prices low while still choking off revenue to Moscow. Analysis suggests that a large portion of its exports are ...

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CII & Alternative Fuel Analysis

Aug. 18, 2023

Analysis of VLCC’s CII rating basis 2023 requirements for the past 5 years show how on average half of the VLCC fleet falls in D&E CII category – meaning that they would have to provide a management plan of how to improve their CII rating to at least midpoint of C rating for the following year.

An ageing VLCC fleet (on average 12 years old) and limited new orderbook will not likely see the CII ratings improving for the sector.  However, when we look at the VLCC newbuilding orderbook, we find that 79% or 11 out of 14 vessel ...

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China Deflation Fears

Aug. 11, 2023

Weekly Highlight 8.11.2023 – China Deflation Fears

The latest inflation data released over night showed China’s consumer and producer prices contracting for the first time since 2020. Slowing demand at home and abroad, combined with a real estate market that continues to struggle has caused suppliers to rapidly cut prices. Deflation would have the potential to slow the Chinese economy even further, prompting calls for additional stimulus measures.

Contrary to the US and EU which have been trying to quell inflationary pressures, China faces concern of stagnating growth and falling prices (Figure 1).  If there is an extension ...

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Bearish Market Sentiment due to Economic Slowdown

Aug. 4, 2023

We wanted to draw a comparison to today’s environment and the early 1990’s recession in the US.  Prior to the 1990 recession, the economy was weakening as a result of restrictive monetary policy enacted by the Federal Reserve.  Their stated intention was to reduce inflation and thereby limit economic expansion.  The immediate cause of the recession was a loss of consumer and business confidence in tandem with the 1990 oil price shock.  We now find ourselves in a similar environment where the Federal Reserve is raising interest rates (the Fed’s benchmark rate is now at a 22-year ...

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