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Global energy markets are entering a new phase

Global energy markets are entering a new phase where climate ambition is taking a back seat to energy security. The latest IEA World Energy Outlook signals a striking shift: under its new "Current Policies" scenario, oil and gas demand will continue rising for the next 25 years, with no meaningful fall in CO₂ emissions unless policies change course. The IEA notes that 2024 marked the hottest year on record, yet governments are increasingly prioritising affordability and stability over decarbonisation. Oil consumption could reach 113 million barrels per day by 2050, fuelled by aviation, trucking, and petrochemicals, while electricity demand is set to surge 40–50% by 2035, largely from emerging economies such as India and Southeast Asia.

This structural demand resilience underpins a long-term supportive backdrop for oil trading activity and, by extension, for tanker employment. More energy moving longer distances – especially to Asia – translates directly into tonne-mile growth. However, the near-term market is being shaped less by macro trends and more by geopolitics and sanctions.

The United States' latest measures against Rosneft and Lukoil, taking full effect on November 21, have triggered a rush by Indian refiners to secure Russian barrels before the window closes. India's Russian-origin crude imports rose to 1.69 million barrels per day in October and could climb further this month as companies expedite deliveries. At the same time, refiners are negotiating new term deals with suppliers from North and South America, Africa, and the Middle East to hedge against disruption. Analysts from S&P Global warn that the sanctions, potentially the toughest yet, could significantly reduce Russia's accessible export market, even if enforcement varies by region.

The immediate consequence has been a sharp build-up of "oil on water," as traders assess compliance risks and reroute cargoes. October alone saw an increase of over 90 million barrels of floating crude stocks, according to the IEA. This logistical congestion has tightened available tanker tonnage, pushing VLCC and Suezmax earnings sharply higher. Spot freight on Middle East–China routes has surged, supported by longer voyage distances and port delays. Refinery outages and depleted product inventories have simultaneously lifted refining margins to two-year highs in Europe and Asia, adding further momentum to tanker demand.

While these disruptions buoy the tanker sector, they also expose its volatility. Once sanctions are fully priced in or new trade patterns stabilise, rates could normalise, though a high baseline of tonne-mile demand should persist into early 2026. For the dry bulk market, the spillover is indirect but meaningful. Elevated bunker costs, rerouted fuel supply chains, and energy-linked industrial activity—particularly in Asia—are shaping voyage economics and supporting coal and iron ore flows.

In essence, the world's failure to pivot away from hydrocarbons ensures that fossil fuels remain central to the global trade matrix. For shipping, this means a sustained foundation of cargo volumes, punctuated by geopolitical disruptions that create both risk and opportunity. The challenge for market participants is to navigate between long-term optimism on energy demand and short-term volatility driven by sanctions, policy shifts, and regional refining dynamics.

S&P Activity:

Dry:

On the Newcastlemax sector, the Scrubber fitted "Bulk Santos" - 208K/2020 New Times and the "Bulk Sydney" - 208K/2020 New Times were sold enbloc for USD 145.5 mills, while the "Seacon Africa" - 206K/2006 Imabari was sold for USD 22.7 mills to Chinese buyers. On the Post-Panamax sector, the "Piavia"- 93K/2011 Yangfan was sold for USD 11.75 mills basis TC attached at 102% of BPI with minimum redelivery December 2025. The China built Ultramax "Beauty Jasmine" - 64K/2015 China Shipbuilding found new owners for region USD 23 mills, while the same age, Japanese built "Grace Harmony" - 60K/2015 Onomichi changed hands for high USD 24 mills. Finally, on the Handysize sector, the "Emil Selmer"- 33K/2010 Jiangsu Zhenjiang was sold for USD 8 mills basis SS/DD due.

Tanker:

On the Suezmax Sector, the Scrubber fitted "Stena Sunshine" - 159K/2013 Samsung was sold for region USD 57.5 -58.5 mills. On the MR2 sector, the Scrubber fitted "Marlin Ammolite" - 50K/2016 GSI, the "Marlin Aquamarine" - 50K/2016 GSI, the "Marlin Aventurine" - 50K/2016 GSI, the "Marlin Azurite" - 50K/2016 GSI and the "Marlin Ametrine" - 50K/2015 Cssc Offshore were sold enbloc for USD 130 mills.

Xclusiv Shipbrokers Inc.