Weight of Freight: VLGC troubles to persist through the rainy season at Panama Canal
Weight of Freight: VLGC troubles to persist through the rainy season at Panama Canal
As draught restrictions ease with the start of a much-awaited rainy season in the Panama Canal, difficulties are likely to persist for very large gas carriers (VLGCs) as other shipping markets move back to the route and escalate competition for transit slots.
Listen to Andres Pacheco, Analyst at the LPG Trading desk for Spain’s Repsol, and Yohanna Pinheiro, LPG Freight Market Reporter, discuss how increased competition to transit the Panama Canal and other market drivers will shape the costs of shipping LPG.
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Key topics covered
- Competitive advantages of the Panama Canal route in US-Asia routes for VLGCs
- Details of the Panama Canal booking system and slot auction price trends
- Effects of eased restrictions at the canal in heightening competition for slots among other markets
- Weather outlook and possible La Nina effects in the markets
- Long term projects to alleviate transits at Panama Canal
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Hormuz crude flows, ship attacks on the rise
Hormuz crude flows, ship attacks on the rise
New York, 2 October (Argus) — Record high tanker freight rates are pushing strait of Hormuz crude flows — and Iranian attacks on tankers — to some of the highest levels since the outbreak of war between Iran and the US. Total Middle East crude oil exports are up by 36pc for the week ending 30 September at 17.92mn b/d, including 12.34mn b/d through the strait of Hormuz, according to vessel information firm TankerTrackers.com. This would place weekly Hormuz crude flows at around 80pc of their levels in February, prior to the joint US-Israeli attacks on Iran, which is estimated by vessel tracking service Vortexa to be around 15.14mn b/d. The US and Iran have not reached any sort of agreement for ending the war, so the risks to ships continue to be as significant as they were earlier in the war when less oil was flowing. But the risks, combined with a limited pool of vessels available to transit Hormuz, has kept freight rates high, incentivizing the dangerous work. The rate for a very large crude carrier (VLCC) to move Middle Eastern crude through Hormuz to Asia-Pacific has been at $34.31/bl since 18 September, its highest level since Argus began assessing the route in November 2016. The spot tanker market is moving from strength-to-strength following the start of the war in Iran, according to Harrys Kosmatos, executive at tanker shipowner TEN, speaking at a forum in New York on Wednesday. He highlighted a deal from earlier in the week for a 2004-built VLCC that a charterer provisionally hired at $2mn per day to transit through the strait of Hormuz. In comparison, a VLCC from the US Gulf coast-China was at $366,704/d on 1 October, per Argus assessments. "You don't even need peace now in Iran, you just need the oil to come out," Robert Bugbee, president of shipowner Scorpio Tankers said. Iran steps up attacks The increased ship traffic has been accompanied by more attacks from Iran, particularly on ships transiting the strait on the southern US-assisted transit route. There were six attacks in the last five days, per the UK Maritime Trade Operations Centre (UKMTO). This includes an attack reported Friday against a tanker exiting the strait which caused a fire onboard. The vessel remains in transit. Iran continues to target crude exports from countries in the Gulf, including the UAE and Kuwait. "Several oil tankers have been hit in the strait of Hormuz in recent days, three of the latest of which are owned or leased by entities in the UAE," according to a statement by the Persian Gulf Strait Authority published by Iranian-government affiliated news agency IRNA on Friday. The Kuwaiti VLCC Kazimah III was hit on 1 October, according to Martin Kelly, former head of advisory at EOS Risk Group, the second Kuwaiti state VLCC hit since 28 September. Since the start of July, 31 of 48 projectile strike incidents reported to UKMTO occurred on the southern US-assisted transit lane. UKMTO acknowledged in its weekly report that there are likely "other projectile strikes occurring that have NOT been reported to UKMTO." By Charlotte Bawol Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Ample Mideast supply may curb Asian buying of US crude
Ample Mideast supply may curb Asian buying of US crude
Singapore, 2 October (Argus) — Some Asian refiners may have cooled their interest in US WTI crude due to more availability of prompt Middle Eastern crude and rising freight costs, although others are expected to maintain their purchases given ongoing uncertainty over the stability of Mideast Gulf crude flows. Traders pegged WTI arriving in January in northeast Asia at premiums slightly below $30/bl to December Dubai assessments. This was weaker than record-high premiums of $30-35/bl against November Dubai assessments that December-arrival cargoes traded at last month, after fresh US-Iran hostilities sparked concerns about Mideast Gulf supply disruptions and boosted Asian demand for US crude. Attacks on Saudi Arabia's 7mn b/d East-West crude pipeline in early September had pushed Asian buyers to step up their purchases of WTI as an alternative to Mideast Gulf crude. Some market sources said Asian refiners may have bought close to 2mn b/d of December-arrival US crude in the last trading cycle, which would be the highest monthly delivery volume since June, based on data from trade analytics platforms Kpler and Vortexa. Others said total purchases might be closer to 1mn b/d. Asian buying of US crude has been slow to start in the current trading cycle for January-arrival cargoes, with minimal activity for January-delivery cargoes heard as of 1 October. By comparison, around 4mn-6mn of December-arrival US crude including WTI had already traded by 1 September, according to Argus tracking. Increased availability of prompt Middle East crude for Asian buyers was a key reason for the reduced buying interest in WTI recently, traders said. Saudi Arabia, especially, has been boosting crude exports, with refiners in Japan, South Korea and India snapping up spot volumes. The total volume of crude exported through ship-to-ship (STS) operations outside the strait of Hormuz reached about 4mn b/d in September, according to Vortexa data. Saudi supplies accounted for 1.1mn b/d or 27.5pc of the total, up from 470,000 b/d or 8pc a month earlier. Saudi Arabia also appears to be restarting crude exports from the Red Sea port of Yanbu, shipbrokers said, after a gap of nearly three weeks caused by war damage to the East-West pipeline. US vs them South Korea is a key buyer of US crude in Asia-Pacific . But current WTI offer levels for January arrivals in northeast Asia are still too high, a South Korean refinery source said, and cheaper cargoes of heavy crude from Canada, Ecuador and Mexico are comparatively more attractive. Seoul has been encouraging domestic refiners to buy non-Mideast Gulf crude through a government freight rebate scheme, as part of its supply diversification efforts. It now aims to provide a 100pc freight rebate to further incentivise domestic refiners to purchase crude supplies from sources outside the Middle East, including the US, Europe and Africa. Current elevated freight costs serve as a significant disincentive to buy long-haul crude, market participants said. Rising freight rates, largely attributable to tightening vessel availability, may be weighing on US crude purchasing decisions among Asian buyers, a Japanese refinery source said. The Argus -assessed freight rate for a very-large crude carrier (VLCC) performing a voyage from the US Gulf coast to South Korea/Japan was at $11.65/bl at the start of September, before more than doubling to about $24/bl by the end of the month. The increase coincided with a surge in tonne-mile demand when tankers carrying crude from Yanbu to east Asia were forced to sail around South Africa's Cape of Good Hope rather than through the Bab el-Mandeb strait because of threats from Yemen's Houthi rebels. The diversion adds around 29 days to the voyage, keeping vessels occupied for longer and delaying their return to the spot market. This has effectively tightened available fleet supply and contributed to upward pressure on freight rates. Despite the slow start to the current trade cycle, some market participants said there was still plenty of time for Asian buyers to step up purchases for January-arrival WTI. Some refiners may still choose to maintain their WTI purchases to avoid any uncertainty over Middle East crude flows, one trader said. This could continue to underpin delivered northeast Asia prices, he added. Some Japanese refiners may have picked up US crude likely for January delivery over 1-2 October, market sources said, although details were unconfirmed. Japan has historically imported most of its crude from the Middle East, but has relied on US crude to cope with the disruptions to those supplies since March. Thailand's demand for WTI is also expected to remain strong because of uncertainty over the reliability of Middle Eastern crude exports shipped through the strait of Hormuz, a Thai refinery source said. The US was the second-largest supplier of crude to Thailand over January-September, with deliveries averaging around 143,000 b/d, according to data from oil analytics firm Vortexa. By Reena Nathan, Sean Lui and YouLiang Chay Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Hormuz STS operations for Mideast Gulf LPG continue
Hormuz STS operations for Mideast Gulf LPG continue
London, 30 September (Argus) — Mideast Gulf oil producers are continuing to offer LPG cargoes on very large gas carriers (VLGC) via ship-to-ship (STS) transfers outside the strait of Hormuz, even though Iran still restricts traffic in the waterway. LPG shipments from the Mideast Gulf are still being shuttled through the strait of Hormuz and loaded onto VLGCs through STS, even though they have slowed considerably since the outbreak of the US-Iran war in February. LPG exports to Asia-Pacific through the strait have reached 3mn bl so far this month, down from 5mn bl in August and 20mn bl in January, according to Kpler data. The charterers are conducting most of the STS transfers off the coast of Oman or west coast India. Most September cargoes from the Mideast Gulf originated from Kuwait's state-owned KPC and Abu Dhabi's state-owned Adnoc. KPC has shuttled around 1.3mn bl of LPG through the strait of Hormuz so far this month across four cargoes. The cargoes were delivered to India's west coast for transhipment before heading to east Asia. Adnoc's shipping arm Admic shuttled 535,830 bl of LPG via the strait of Hormuz in early September, transferring the cargo off Sohar in the Gulf of Oman before shipping it to Indonesia. STS activity picked up as a means to circumnavigate tighter controls imposed by the Iran's Persian Gulf Strait Authority (PGSA) to restrict on flows through the strait. The authority warned in late August that vessels breaching the strait's transit requirements could face restrictions on future passages, including fines, seizure or confiscation. The PGSA threatened to extend restrictions to charterers , which could be blacklisted if they pressure vessels to disregard the rules. Limited available LPG coming from the Mideast Gulf as a result of the US-Iran war coupled with persistently high Asian demand, has pushed buyers towards US cargoes as an alternative. Asia-Pacific LPG imports from the US Gulf have risen to 328mn bl so far this year, up from 297mn bl in 2025. Total Asia-Pacific LPG imports declined to an average of 508mn bl so far this year, compared with 597mn bl in the same period last year. By Charlotte Buchanan Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Hormuz Tuesday traffic steady at 17: Windward
Hormuz Tuesday traffic steady at 17: Windward
Houston, 30 September (Argus) — Vessel traffic through the strait of Hormuz on Tuesday was unchanged from the previous day, with 17 vessels transiting the strait despite heightened tensions, according to maritime security firm Windward. Of the 17 vessels six were inbound and eleven outbound. The inbound traffic was evenly split between Iran's preferred northern corridor and the southern, US-assisted route. Of the outbound vessels, five used the northern corridor, five used the southern route, and one transited the high-risk central route. Inbound vessel classes consisted of two tankers, two cargo ships, and two bulk carriers. The outbound vessel classes were six tankers and five cargo ships. Attacks on vessels transiting the strait continue, with three incidents reported on 30 September on tankers, according to the UK Maritime Trade Operations (UKMTO). A day earlier UKMTO reported that a Kuwaiti VLCC was struck by an unidentified projectile. The four attacks this week account for nearly 10pc of the 42 cumulative strikes recorded since early July. Vessel transits remain consistent at 13pc of the pre-war average of 135 daily transits. By Anjali Shenoy Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
