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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Phillips 66 moves more crude under Jones Act waiver
Phillips 66 moves more crude under Jones Act waiver
Houston, 15 May (Argus) — US refiner Phillips 66 shipped crude from the US Gulf coast to the US east coast on a foreign-flagged ship in late April, marking at least the second time the refiner has utilized a Jones Act waiver for crude since the start of the waivers in March. The Aframax Front Altair discharged approximately 596,700 bl of West Texas Intermediate crude at the 258,500 b/d Bayway refinery in New Jersey on 13 May after loading it from a terminal in Beaumont, Texas on 29 April. Phillips 66 in early April used a foreign-flagged Panamax vessel to move Bakken crude on the same route taken by the Aframax, the likely first instance of the company utilizing a waiver. US president Donald Trump approved the Jones Act waivers on 17 March, easing domestic shipping requirements for US-US shipments to attempt to offset surging commodity prices caused by the US-Israel war with Iran. His administration has since extended the original 60-day waivers, set to conclude on 17 May, for an additional 90 days terminating on 16 August. The waivers allow shippers to transport crude, natural gas, natural gas liquids, fertilizer, coal and other energy-related products from one US port to another without using US-built, US-crewed and US-flagged ships, as the 1920 Jones Act requires. Demand for refined products shipments via Jones Act waiver deals has outstripped crude demand since the program's inception. Major US refineries are typically pipeline fed when the supply is already domestic, benefiting only in fringe cases where a seaborne shipment can bypass some obstacle in that delivery system or otherwise work out to a cheaper $/bl rate. But places like California and Hawaii, where refinery capacity is low, have demonstrated stronger comparative demand for Jones Act waiver shipments of refined products. This demand is set to rise after international clean tanker rates loading in the US Gulf coast collapsed from mid-April on an influx of displaced Pacific tonnage post-war. The time charter equivalent rate for a US Gulf coast-Caribbean voyage, which represents the return a shipowner might expect per day, dove from an all-time high of $116,300/day on 14 April to -$688/day on 14 May. The latter rate suggests vessel operators might lose money on this voyage at current rates, but that would be less of a loss than allowing the vessel to rack up operating costs while remaining uncontracted. By David Haydon Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
US Gulf VLGC rates hit record $305/t on war
US Gulf VLGC rates hit record $305/t on war
London, 15 May (Argus) — US Gulf very large gas carrier (VLGC) freight rates climbed to $305/t on the Houston-Chiba route this week, the highest since Argus began assessments in 2013. Demand has switched to the longer US Gulf-east Asia route to replace lost supply caused by the effective closure of the strait of Hormuz. This shift led to a rush of bookings for May-loading cargoes, resulting in higher demand for Panama Canal transit slots and rising costs there. Some VLGCs were redirected on the longer Cape of Good Hope route. The rush of bookings has depleted much of the available tonnage in the US Gulf, but demand for LPG remains high with India and China facing significant shortages because of the lost Mideast Gulf supply. Chartering activity has continued in the US Gulf, but the rush of May bookings has left charterers competing for a rapidly shrinking pool of tankers, pushing the rates up. The Houston-Chiba rate hit $305/t on 13 May, with two fixtures around that level. That is more than double pre-war levels of $147/t, having accelerated through $248/t in late April and $293/t last week. The vessel shortage reflects the much longer journeys, not increased demand for VLGCs, as the loss of Mideast Gulf supply has reduced global product availability. Around half of the 120 VLGCs that loaded in the US Gulf in April were routed via the Cape of Good Hope after Neopanamax slot auction prices hit $1.076mn on 29 April — the highest since May 2024 and roughly four times pre-conflict levels. The longer routing adds more than 20 days to voyage times compared with the Panama Canal passage, occupying vessels for longer and slashing available tonnage ahead of the June loading window. Fixing activity has fallen sharply as a result with charterers securing around 24 spot and time charter bookings from the US Gulf for June to date — around one-third of the 52 fixtures completed in May — with fewer than 20 confirmed by mid-May compared with more than 40 each in the two preceding months. Vessel scarcity is likely to persist. Houston-Chiba rates are being sustained largely by exporters with long-term product contracts in place rather than by spot demand for LPG, with US supply largely unprofitable in Asia-Pacific at the current price and freight rate. Charterers have responded by swapping or delaying shipments and utilising vessels on long-term deals where available, and some traders have re-let vessels rather than use them for exports. The spot market has reached a stand-off, with remaining June cargoes likely to be fixed above the last-done level. The Ras Tanura-Chiba rate also continued to rise on limited options for east of Suez fixtures, reflecting broader vessel scarcity across the market. The underlying demand pull stems from the redirection of Asian LPG buying toward the US Gulf. Global seaborne LPG exports remain around 600,000 b/d below pre-war levels, sustaining the switch toward long-haul US Gulf loadings that has absorbed fleet capacity and compressed June availability. Conditions in the Mideast Gulf remain uncertain and the timeline for any resumption of normal shipping operations is unclear. Further rate gains are possible while June cargoes remain uncovered, although charterer reluctance to engage above current levels may cap any further gains. By Harry Heath Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Iran's Kharg Island loads 1st tanker in a week
Iran's Kharg Island loads 1st tanker in a week
New York, 14 May (Argus) — A tanker loaded crude from Iran's Kharg Island terminal Thursday, countering claims from the US that storage at the country's main oil export hub is full and loadings have stopped. The loading of the roughly 500,000 bl-capacity tanker at Kharg Island would mark the first loading there since 7 May, according to maritime information firm Windward. Earlier on Thursday, US treasury secretary Scott Bessent said in an interview on CNBC that there have been no loadings of crude from Iran in the past few days, and that the US believes Iran's oil storage is full. "None of the ships are getting out. None are coming in. So, they're not able to store oil on the water," Bessent said. But Iran still maintains significant capacity for storage on the water. Windward estimates that roughly 20 empty tankers are staged nearby to Kharg, with a combined estimated carrying capacity exceeding 25mn bl. "There are still plenty of cargo-empty tankers both inside and outside the blockade perimeter," vessel information firm TankerTrackers.com said on 12 May. And empty vessels continue to arrive at Iranian ports, adding to the country's storage capacity. A total of six empty oil and gas carriers have crossed the strait of Hormuz in violation of the US blockade last week without any reported interdictions, according to data from vessel tracking firm Vortexa. The US imposed a blockade on Iranian ports on 13 April in response to Iran establishing control over the strait of Hormuz after the 28 February start of the US-Iran war. The US' blockade has been successful in significantly curtailing Tehran's oil exports, but it has yet to send Iranian production into the steep decline predicted by US officials. By Charlotte Bawol Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
US blockade yet to cut deep into Iranian production
US blockade yet to cut deep into Iranian production
New York, 14 May (Argus) — The nearly one-month-old US blockade of Iranian ports has been successful in significantly curtailing Tehran's oil exports, but it has yet to send Iranian production into the steep decline predicted by US officials. Prior to the start of the blockade on 13 April, Iran's waterborne crude exports averaged about 1.8mn b/d. But since then Iran has not successfully exported any crude by sea, according to vessel tracking firm TankerTrackers.com, which defines exports as tankers which made it through the blockade line and have not returned with the oil. US Central Command (Centcom), which oversees the Middle East-based US forces, claims that 67 commercial vessels have been redirected since the start of the blockade, 15 vessels supporting humanitarian aid were allowed to pass and four vessels were disabled to ensure compliance. But Vortexa data shows 88 vessels carrying energy commodities have circumvented the US' blockade, with nine reported interdictions by US forces. The impact of the blockade on crude production is less clear, however. US president Donald Trump on 26 April predicted that Iranian oil infrastructure would "just explode from within" in "about three days" because of the blockade, forcing oil well shut-ins. But days later Iran's parliamentary speaker Mohamed Ghalibaf mocked Trump's claim. "Three days in, no well exploded," Ghalibaf wrote on social media. "We could extend to 30 and livestream the well here." Iranian crude production in April fell by 130,000 b/d from the prior month to 2.95mn b/d, according to Argus estimates, but that decrease is among the lowest for Gulf producers . The modest April decline reflects both the mid-month start to the blockade and the ample available storage capacity onshore and offshore for Iran. As of the last week of April, Kpler assessed Iran's onshore usable storage at around 39mn bl, and available floating storage of about 4mn bl, giving it just over a month before having to shut in supply at current production levels — although it could make pre-emptive cuts before then. Vortexa put Iran's available onshore storage capacity at a little below 40mn bl, but highlighted a significant number of empty tankers which it said could be enough to sustain production at then-current levels for up to two months. But Consultancy FGE put Iran's available onshore crude storage capacity at nearly double those figures — at around 80mn bl — implying that Iran would be able to produce at current levels for a little over two months. US officials have repeatedly emphasized the dire economic impact the blockade ports is having on Iran. "The economic pressure that creates on them greatly outstrips the pressure on us," US defense secretary Pete Hegseth told a Senate panel on 12 May. But Iran has shown little outward signs that it is ready to capitulate. The two sides have not returned to face-to-face meetings in weeks, and Iran characterized its most recent offer as "reasonable" and "generous" after Trump labeled it "totally unacceptable." By Charlotte Bawol and Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
