Maria Bertzeletou: Here is a puzzle that's been running through the crude market during this disruption. A cargo loaded Fujaira on the open side of the Strait of Omuz. The loading port is outside the strait, but that doesn't tell you the whole journey. For some cargoes, it began on a sandal tanker inside the gulf. They crossed the strait, went into storage, and loaded again for the long foliage. One barrel Two ship movements, and if you can't profess exports, you just invented crude that doesn't exist. That's the trap in this market. And underneath it's a real reorganization of how crude moves. Who crosses the Gulf where Atlantic cargos gets split? And who is ordering ships for a trade that may not look like this in three years? Welcome to current intelligence, where we take the commodity story and follow it down to the seats. Three episodes on the dry side. Bookside out of Kin. Agriculture on the calf. Then Chinese call. Today we cross to the website. Crude tankers. I am Maria Brigaleto, senior market analyst and senior research. And with me is George Aguilar, freight analyst at Signal Maritime. George Latka.

George: Thanks, Maria. Good to be here.

Maria Bertzeletou: Let's go back to that cargo loading at Fujaira. What we actually count. You count the delivery barrel once, then you measure the vessel separately on each leg. The sudden movement inside the calf is real employment. It uses a ship and it uses time. But it's not a second export, and the label hides the upstream journey. A loading port tells you where the ship was. It doesn't tell you where the crude came from or how many vessels it took to get there. That's a threat we want to follow through PLCCs, Swiss maxes, and AfroMaxes. Why has freight in all three come under so much?

George: Several pressures have come together and made the tanker market less efficient. Ships spend longer waiting, transferring cargo, and reaching their next loading. The classes are closely connected. When a suitable VLCC isn't available, charter look at alternatives, changing employment for Swiss max and AfraMaccess too.

Maria Bertzeletou: The market found a way to get some crude through a moose using stat attackers. Why has it become such a train on vessel availability?

George: The shuttle tanker takes oil from inside Ormuz outside to the Gulf of Oman. It transfers the cargo to another tanker waiting outside the strait, which then carried it onwards, mainly to Asia. Gulf producers have used their own ships and time chartered tonage for the crossing, as fewer owners have been willing to take that risk.

Maria Bertzeletou: And the ship waiting outside can't rely on a steady arrival of car.

George: Exactly. In the movements we have been following, the daily volume coming out has varied from effectively zero to around ten million barrels. That's an indication of the variation, not a steady daily export rate. The onward ship still has to be close enough to receive the cargo when it arrives.

Maria Bertzeletou: So it can be committed to the job, but spend days waiting to load.

George: Yes, then the transfer itself takes time. The system keeps some oil moving, but each cargo can occupy more vessels and more days than a direct loading would. Freight reflects both the risk of the crossing and the shortage of vessels ready for the next cargo.

Maria Bertzeletou: And with Fujaira, we need to distinguish the cargoes arriving by shuttle from those arriving by pipeline.

George: We do. a loading outside or moose doesn't tell us how the crude got there. For the shuttle cargoes, the extra vessel leg is part of the freight story.

Maria Bertzeletou: Saudi Arabia also used the east west pipeline to move oil to the Red Sea. That bypass has its own vulnerabilities as the disruption at Yanbu showed.

George: The East Pipeline carries Saudi route to Yambu on the Red Sea avoiding Oromus. But a tanker heading from Yambu to Asia normally passes through the Babel Mandep Strait. Houthi threads there added another reason to change the route.

Maria Bertzeletou: Which is where Ain Sugna and Sidika Caray came into the picture.

George: Some cargo went north from Yambut to Ainsukna in Egypt. The Sumet pipeline then carried the oil to Sidi Kerir on the Mediterranean for another tanker to load. That added a sileg, a pipeline transfer, and another load.

Maria Bertzeletou: And the ships had to get to that new loading point.

George: In the Saudi vessel movements we have followed, some vessels coming from the east ballasted around the Cape of Good Hope and through Gibraltar to reach Sidi Kerir. If the loaded ship then went to Asia while avoiding Babel Manteb, it needed the Cape Route again. The extra distance could affect both the empty voyage and the loaded one.

Maria Bertzeletou: Then the pipeline itself was hit.

George: Yes, attacks in September sat the East West pipeline and Yambo loadings were subsequently suspended. Thumb Saudi delivers to Europe were cancelled. A route that has helped bypass or moose was itself disrupted as a result.

Maria Bertzeletou: How did Saudi Arabia adapt its export routes after the disruption?

George: The response included more South Gulf loadings and offers to supply Asian buyers through ship-to-ship transfer of the Gulf of Oman. That brought us back to a Gulf crossing and an onward tanker waiting outside Ormuz. An offer is not a completed delivery, but it shows how the loading arrangements were being changed.

Maria Bertzeletou: Our Moose freight was picked up both that response and the uncertainty over repairs. If the pipeline starts pumping again, how quickly can translate into regular loadings at the end of the

George: The initial reports gave different repair estimates and traced the possibility of partial pumping before all the work was finished. For freight, we need to know how much oil can reach Yambu consistently and whether ships can rely on the loading dates.

Maria Bertzeletou: What if some pumping returns while repairs continue?

George: Parcel flows can support some cargoes while others still need alternative arrangements. If repairs take longer, more loadings may be delayed or cancelled. Owners then face a choice between waiting for the cargo and moving their vessels to another destination.

Maria Bertzeletou: And once repairs are complete.

George: Dependable Yambu loadings could reduce the need for some subtle work and release ship time. But the onward voyage still matters. Repairing the pipeline does not by itself determine whether owners will accept passage through Bubble Man Dep. The pace of any freight relief depends on both.

Maria Bertzeletou: A cancellation can also remove a tanker cargo altogether. Exactly.

George: Exactly. Rerouted barrels can use more SIP time. Barrels that never load remove employment. We need to see which effect is larger.

Maria Bertzeletou: And that brings us to the SIPs available for those jobs and Synegor role in the VLCC market. George, in the signal lotion figures you brought to this discussion, Synergore accounts for around one hundred twenty five VCCs under conventional operation. How does that fit into the availability picture?

George: When an operator has that many vessels, the timing of fixing matters to a large number of cargoes. Changes in ownership and commercial operation can also involve time between employments, and we have also seen more idle time in that fleet than in the wider market.

Maria Bertzeletou: How much of that fleet can a charger actually use for the next loading?

George: That's the important question. A vessel may be waiting but already committed, or in the wrong place for the cargo. We need its open data and location, as well as its charter commitments. The fleet total can be large while the workable list for a particular loading remains short.

Maria Bertzeletou: What can the idle time tell us about Freight?

George: It helps us understand how much time the fleet is spending between cargoes. It doesn't establish why an owner is waiting or what rate they would accept. The freight effect comes down to which vessels are actually offered and able to make the date.

Maria Bertzeletou: Let's turn to the Atlantic. How are longer voyages to Asia affecting real CC availability?

George: Our estimates put west to east crude flows above five million barrels per day in the first months after the war began. In the twenty twenty six year to date series prepared for this discussion, the average was around four point six million barrels per day.

Maria Bertzeletou: If gulf supply becomes more reliable, how much of this shift towards Atlantic crude could persist?

George: Atlantic supply growth has helped meet buyers in Asia looking for alternatives to disrupted Gulf cargoes. Emergency stock releases were also part of the wider supply response. The freight effect comes from where those replacement barrels load and how far they have to travel.

Maria Bertzeletou: How much longer does that keep a VLCC committed before it becomes available for the next car?

George: It can change it substantially. A VLCC taking crude from the US Gulf, Brazil or West Africa to Asia via the Cape of Good Hope is committed for much longer than on a typical Middle East Gulf to Asia voyage. Add the positioning and return leg and the vessel can be away for months.

Maria Bertzeletou: So a larger Atlantic supply program doesn't immediately make the freight market easier.

George: It supplies the oil, but it also commits vessels to longer voyages. The effect depends on the origin and the destination. A Brazilian cargo going to Europe is a different employment from one going to China. That's why we follow where the next barrels are actually being loaded and discharged.

Maria Bertzeletou: Then there is the effect on the Atlantic itself. If more VFCCs are taking those long voyages east, who carries the cargoes that stay within the basin?

George: That creates more opportunities for Suezmax and Aframax. In the twenty twenty six activity we have been following, VLCCs loading the Atlantic have increasingly been heading east. We have also seen strong Suezmax employment carrying crude from Brazil, West Africa, Guyana and Venezuela to Europe, intrabasing carcos.

Maria Bertzeletou: So the larger ships live on long voyages and the remaining cargo draw on the smaller classes.

George: Yes, and then Brazilian and West African cargoes can compete for the same Suez maxes. When a vessel is fixed in one area, it may no longer be able to make a loading date in the other. The pressure can build, even without a matching increase in total export.

Maria Bertzeletou: Does splitting a VCC cargo between Swiss maxis add to that pressure?

George: It does. If a suitable VLCC is difficult to secure and the terminals and cargo program allow it, a parcel of about two million barrels can be divided into two Suezmax cargoes of about a million each. That creates two Suezmax jobs from a cargo that could have used one VLCC.

Maria Bertzeletou: On Afromaxis though, there has been extra supply from LR two tankers moving out of clean products.

George: Our indication is between one hundred and ten and one hundred and twenty LR2s moving into the Aframax sector over the preceding year. That increases the vessels competing for Aframax work. But these are existing vessels changing employment and their location still matters.

Maria Bertzeletou: Can those LR2 vessels ease pressure on axis, or is the extra Atlantic cargo demand already taking up that capacity?

George: It can, depending on the cargo program, they add supply, but their location and the cargoes they can carry matter. As more VLCCs take long voyages to Asia, Suezmaxes and Aframaxes can pick up more work within the Atlantic. That can absorb some of the additional LR two capacity. Stronger Chinese buying could draw more VLCCs east, increasing that pressure.

Maria Bertzeletou: Our estimates suggest China's seaborne crude imports fell by up to four million barrels a day during parts of the war. How does renew Chinese buying mean for tank demand?

George: We have seen signs of buying picking up again during this disruption. When direct gulf supply is difficult to rely on, a returning buyer may need a replacement cargo from the Atlantic basin. That adds a longer voyage to the programme.

Maria Bertzeletou: The program. And this can happen even with slower growth in China's underlying oil consumption.

George: Yes, buying can recover because a refiner needs to replenish stocks or replace a missing supply source. It doesn't require consumption to accelerate at the same pace. For freight, the immediate effect is the cargo being booked and the distance the vessel has to travel.

Maria Bertzeletou: How much does a securing feedstock matter when a refinery is making that choice?

George: A reliable arrival date can carry more weight when supplies are disrupted. Refiners still look at the grade and the delivered cost, including freight, but the need to keep the refinery supplied can make a more distant cargo worth pursuing.

Maria Bertzeletou: So renewed Chinese buying cannot do the athlete control while VHCs are taking longer to turn around.

George: Exactly. The question is whether that buying becomes sustained loading activity, and if refiners instead cut their runs or fewer cargos are available to load, that can weaken tanker demand. We need to follow both the cargos and the vessels.

Maria Bertzeletou: Our July's tanker market monitor showed nearly two hundred and sixty crew tanker owners in the first half of this year, including two hundred VLCCs of about seventy-eight percent of the total. George, before those ships arrive, where could relief from freight come from?

George: From better use of the fleet already trading through easing of the geopolitical risk premium, more dependable loadings, fewer transfers and shorter waiting times. That would free up vessels for the next cargo sooner, and that could in theory ease freight before new vessels are delivered.

Maria Bertzeletou: In the second hand market, the strongest gains were in older ships. By end of August, assessed values for 20 year old PLCCs were up 90% year on year, and for SwissMox seventy eight percent. How much do those ships actually help ease availability?

George: They can help provide their charters accept them. That is why the total fleet count can look comfortable, while suitable vessels for a particular cargo remain scarce.

Maria Bertzeletou: The order book held already past 600 crew tankers by mid-year. As Kelsey delivery will speed through 2027 and 2028, what do you believe is the risk to freight?

George: New ships arriving while older vessels keep trading and voyages become more efficient. If cargo demand does not absorb that additional availability, owners would face more competition for employment and pressure on freight.

Maria Bertzeletou: That brings us back to China and the demand those ships will need. Electric vehicles are estimated to displace around 1.2 million barrels a day of oil demand in this year. That is demand avoided rather than an equal fall in good imports. We need to distinguish stock building from sustained consumption growth. George, what are you watching on the French side? It could very

George: Very well be the case that China's oil demand has actually peaked. And the extra cargoes we'll see from now on coming from China will be for stockpiling reasons and energy security. If that is indeed the case, we will be monitoring where, if from anywhere, will there be demand growth going forward and whether it will translate to increased on miles since Increasing production lies in the Atlantic basin and increasing consumption east.

Maria Bertzeletou: Bauxite Grain, coal and now crude. This episode has followed how old keeps moving through disruption and what that means for tangifraid. George, thank you.

George: Thank you, Maria.

Maria Bertzeletou: Thank you for watching current intelligence. Follow the signal. We will see you in the next episode.