telcotales

Lucky, not a pro. Not investment advice.
I post, therefore I am, bored.

[telcotales @telcotales]

@MJazanovich Unfortunately, I believe this war is no near being over yet.

[telcotales @telcotales]

😀

[telcotales @telcotales]

😟

[telcotales @telcotales]

Things are not getting better for Whirlpool;

[telcotales @telcotales]

@CRUDEOIL231 Click on the link for the full text, it is quite long.

[telcotales @telcotales]

Thoughtful analysis from @CRUDEOIL231 ;
https://t.co/t833x8I1Dv

[JH @CRUDEOIL231]

Covered the last of our shipping shorts today and closed out the book. Tactical trades aren't usually my game, but this one printed a solid profit. Meanwhile the latest data out of Kpler's Matt Wright is a reality check for this market.

Sanctions relief on paper tankers isn't going to break this structural freight squeeze. The problem right now isn't an outright shortage of hulls—it’s a severe shortage of tonnage with both the willingness and technical capability to transit the Middle East.

Middle East VLCC ton-miles may have bounced back to 5yr avg, but they’re still sitting 34% below 2025 levels. Even ton-days—which far better capture the operational friction of STS lightering—remain down 24% versus pre-war baselines.

STS operations have kept Gulf exports moving while capping transits through the Strait of Hormuz, but the system is decaying into pure operational inefficiency.

The Gulf of Oman shuttle fleet has bloated to roughly 80 VLCCs, yet round trip voyage times are blowing out to 23 days—more than double the optimal 9-10 day Basrah-Sohar loop.

With infrastructure and crew bottlenecks choking transfer volumes in the Gulf of Oman, STS ops are getting pushed out to West Coast India and Malaysia. Diverting via WCI tacks on roughly 4 days to the shuttle leg, while direct-discharge runs tie up hulls for significantly longer.

About 50% of this Gulf of Oman shuttle armada is owned by Sinokor, with state-owned oil majors holding down most of the balance. This extreme ownership concentration leaves charterers bidding against a tiny, hardened pool of owners willing to sail into a hot zone—handing them immense pricing power at the fixture desk.

As shuttle operations expand and strike risks escalate, charterers are running out of options. That is precisely why war risk premiums refuse to budge and freight rates won't cool off despite throwing more metal at the problem. For every incremental barrel of export capacity, the system burns through hulls at an accelerating rate.

Surging bunkers and insurance have definitely jacked up voyage OPEX, but they still don't explain the full magnitude of this rate explosion.

VLCC operating and voyage costs are up 140% y/y. Notable on paper but practically a rounding error against a 2,000% moonshot in spot freight. And remember that’s across the global fleet—Hormuz war insurance and crew danger pay sit well north of that figure.

Bunkers dominate the cost stack. Regional conflict has sent bunker prices ripping, Singapore HSFO is up 134% to $890/mt, while VLSFO jumped 105% to $911/mt.

That said standard VLCCs primarily burn heavy fuel, and with 62% scrubber penetration across the fleet, owners are somewhat insulated from the high sulfur spike. Cargo war risk insurance for Hormuz transits did reprice violently from $0.05/bbl to $3.50/bbl—a hefty jump, but still a fraction of a delivered cargo clearing well over $30/bbl.

Astronomical Middle East earnings have killed owners' appetite to ballast into the Atlantic. Middle East TCEs are printing a massive premium of over $500k/day against Atlantic runs. Charterers in other basins are forced to compete against these insane Middle East fixtures, even when local physical fundamentals have zero business paying record freight.

This dislocation launched US Gulf to Asia rates toward $40/bbl in recent weeks, forcing select West African stems to downsize from VLCCs onto Suezmaxes. This is textbook local disruption exporting systemic volatility to the global tanker complex.

Rn the hard ceiling on dirty freight isn't the physic vessel count—it’s refinery margins.

Heavily discounted Middle Eastern barrels have allowed Asian crack spreads to stay in the green despite monstrous freight bills. But Atlantic crude is a different story. Crushing transport costs have pushed select Asian margins into negative territory, pulling the rug out from under Atlantic VLCC fixtures.

Atlantic VLCC rates look vulnerable to further downside, while Middle East runs will stay heavily bid, backstopped by war risk, constrained shuttle logistics, and superior cargo level netbacks.

A mere normalization of Middle East export volumes won't fix these broken freight economics. Until physical security threats abate and fleet utilization unclogs, the Middle East will continue dictating global VLCC price discovery.

#oott #iran

[telcotales @telcotales]

An OK overview for Stonex;
https://t.co/4WflzfO9WN

[telcotales @telcotales]

Sorry refines >> consumes.

[telcotales @telcotales]

Been hearing about this for a while;

https://t.co/Ro7jvRYopC

[telcotales @telcotales]

Also.

If US diesel is prevented from being exported, 8% of total volume goes down in price.

However International diesel, 17% of total volume, should go up in price.

Because the US in aggregate exports more diesel than it refines.

Maybe US refiners came up with the idea.