EU’s Sanctions on Russia:
A Delicate Balance of Politics and Economics
On Friday the EU imposed its 18th package of sanctions against Russia for its February 2022 invasion of Ukraine. This round of sanctions may affect India more than previous ones.
They aim to hit Russia’s energy, finances, trade, anti-circumvention, military capabilities and supply chains, and protect EU Member states from Arbitration.
The G7 Nations – Canada, France, Germany, Italy, Japan, the UK and US announced a sanctions package in 2022. It included a price cap of $60 per barrel of Russian Oil and banned Russia from global bank transfer systems such as SWIFT.
Blame geopolitics and economic interests. The G7 and EU opportunistically skirted the sanctions by buying refined petroleum products from India. Another sanctions-buster was the shadow fleet of 1,000 tankers that Russia used to move its Oil. The ban on third-country exports of refined oil has give powerful exceptions: Canada, Norway, Switzerland, the UK and the US.
China, India and Turkey are the biggest buyers of Russian oil. So, Russian workarounds are certainly working. The EU too has been the largest buyer of Russian LNG since the first sanctions until May 2025. Russia imports sanctioned goods through Georgia, Belarus and Kazakhstan while China supplies it high-tech products. IMF says Russia’s GDP per capita has declined to $14,260 from nearly $16,000 in 2013. However, at the same time there are anecdotal reports about how stores in Russia are packed with luxury goods.
· How new EU sanctions could change tanker trades beyond Russia
- Lower price cap could push Greek operators back into non- Russia trades, a negative for mainstream Aframax and Suezmax rates
- Russia could struggle to replace Greek ships with shadow fleet tonnage, creating more demand for non-sanctioned tankers serving India and China, a positive for VLCC rates
- Eventual EU prohibition on diesel imports derived from Russian crude would have positive effect on product tanker tonne-miles
- The world needs anchors of stability, new engines of growth and development models that can be scaled and shared. India with its unique strengths and experience, is ready and willing to offer all three.
- Philippine goods to face 19% tariff, US Exports levy-free. American President says Maila’s dealings with Beijing don’t bother him “at all”.
- US, Japan agree trade deal, lowering threatened Trump tariff to 15%. The President hails it as “largest deal ever” and PM Ishiba claims ‘significant achievement’.
- State-owned Oil India Ltd is in talks with global exploration and production (E&P) majors, including ExxonMobil, TotalEnergies and Petrobras, to jointly explore hydrocarbon blocks in India, said two people in the know of the developments.
Oil India Ltd. has already signed pact with Petrobras to bid for Oil, Gas assets and exploration in blocks in India.
- In April, President Donald Trump had issued an executive order expediting US licensing of deep-sea mining in international waters, departing from international law to unleash what the administration called a “gold rush” to “counter China’s growing influence.” On
Monday, China and other nations condemned the move at a meeting of the International Seabed Authority, the United Nations- affiliated organization drafting regulations to govern mining in the global seabed.
“It is outrageous that the US side is ignoring the strong opposition of the international community and pushing forward unilateralist hegemonic acts,” said China representative Wenting Zhao at a meeting of the 169- nation International Seabed Authority (ISA) in Kingston, Jamaica.
China, which is set to conduct ISA-sanctioned tests of two seabed mining machines in the Pacific over the next year, already dominates the critical minerals supply chain on land.
A Canadian-registered seabed miner, The Metals Company, had successfully lobbied the US president, tapping into his pursuit of China- free metals. The global seabed, TMC repeatedly emphasized as it lobbied politicians and the White House, holds the planet’s largest estimated reserves of minerals like cobalt and nickel in the form of black rocks called polymetallic nodules. These cover the Pacific Ocean floor by the billions.
- Putin Steps in as Iran Faces Western Heat over Nukes; Russia deploys Warship to Iranian Port.
- President Trump was Caught Off Guard by strikes on Syria, says White House.
U.S. President Donald Trump was “caught off guard” by recent Israeli strikes on Syria said White House Press Secretary Karoline Leavitt on Monday (July 21). She added that Trump “quickly” called Israeli Prime Minister Benjamin Netanyahu to “rectify the situation”.
WH Press Secretary Leavitt’s comments came days after Israel launched airstrikes in Damascus, while also hitting government forces in the south, demanding they withdraw and saying that Israel aimed to protect Syrian Druze – part of a small but influential minority that also has followers in Lebanon and Israel. The airstrikes blew up part of Syria’s defence ministry and hit near the presidential palace. On Thursday, the Syrian state news agency said Israel carried out an airstrike on the vicinity of Syria’s Sweida, where scores of people have been killed in days of conflict pitting Druze fighters against government troops and Bedouin tribes. The United States said on Thursday (July 17) it did not
support recent Israeli strikes on Syria and had made clear its displeasure, while Syrian leader Ahmed al-Sharaa accused Israel of trying to fracture his country and promised to protect its Druze minority.
- Ukraine’s new prime minister said she’s likely to seek
new International Monetary Fund financing to shore up the nation’s fiscal needs with no end to Russia’s assault in sight.
Yuliia Svyrydenko, a 39-year-old ally of President Volodymyr Zelenskiy became Ukraine’s second female head of government last week.
The cabinet overhaul was part of an effort to move into position presidential loyalists who can potentially win favour with Trump. Svyrydenko took office 11 weeks after her team at the Economy Ministry secured a deal with Washington over access to Ukraine’s natural resources.
She laid out the country’s budget squeeze in stark terms. Global donors have so far earmarked only half of the estimated $75 billion that the war- strained budget requires over the next two years, she said.
“If the baseline scenario assumes the war will continue into next year, it is very likely we will have a new IMF program,” Svyrydenko told Bloomberg News in her first interview since taking office. Economic and military scenarios will be on the agenda during the August visit, “to determine whether a new program would be reasonable and what its likely parameters could be,” she said.
In addition to bolstering Ukraine’s finances, Svyrydenko’s main objective will be to ramp up the country’s domestic weapons production as a hedge against the risk of losing outside help.
There’s only so much to go around.
“Some little piggy had all the roast beef, so you guys get none.”
We will take a quick look at some of the critical figures and data in the energy markets this week.
We will then look at some of the key market movers early this week before providing you with the latest analysis of the top news events taking place in the global energy complex over the past few days.
-Proving most of industry watchers wrong, diesel continues to strengthen in July, contradicting usual commodity cycles that should place the premium on more seasonal products such as gasoline and defying expectations that Donald Trump’s tariff warfare would primarily weaken middle distillates.
- US diesel stocks have been below the 5-year range since
May, falling to their lowest since 1996 for this time of the year, exactly at
a time when the transatlantic trade to Europe is the most profitable in years.
- In stark contrast to previous years, the usual summer craze in gasoline markets failed to materialize, keeping bullish bets on gasoline at an 8- year seasonal low, whilst hedge funds and other money managers are the most bullish on diesel since 2018.
- European politics have added a new twist to diesel cracks after Brussels imposed an import ban on refined products made from Russian crude, impacting Turkish and Indian refiners and leaving the Old Continent’s middle distillate short even more exposed.
- Europe’s benchmark ICE gasoil crack soared to $28 per barrel this week whilst US diesel traded even higher at $34 per barrel, an almost
$10 per barrel premium over next year’s August 2027 diesel crack futures contract.
Market Movers
- UK oil major BP (NYSE:BP) named Albert Manifold as its new chairman, replacing the outgoing Helge Lund with a chief executive that has had no previous experience in the energy sector.
- Simultaneously to its board moves, BP has agreed to sell its US onshore wind business to US-based developer LS Power as part of CEO Murray Auchincloss’ target of divesting $3-4 billion this year.
- Norway’s state energy company Equinor (NYSE:EQNR) inked a 10- year natural gas supply deal with German industrial giant BASF (ETR:BAS), locking in direct deliveries in a paradigm shift for European manufacturers.
- Portuguese oil firm Galp Energia (ELI:GALP) is reportedly seeking to close a deal to divest part of its 80% stake in Namibia’s giant 10-billion- barrel Mopane discovery by the end of this year, seeking to bring in an ‘experienced operator’.
Tuesday, July 22, 2025
Oil prices have been capped by non-cessant speculation that the Trump administration might run out of yet another deadline, this time failing to post any notable success stories in bilateral trade talks ahead of the August 1 deadline. In fact, the fallout between Europe and the United States might deteriorate over the upcoming days as this week has seen top EU officials doubt the probability of a trade deal being concluded.
Waiting for the next big move, ICE Brent is currently trading around $69 per barrel.
Europe Starts Drawing Up US Retaliation Plans. According to media reports, the probability of the US and the EU finding common ground on tariffs before August 1 is limited, prompting several countries incl.
Germany to draft ‘anti-coercion’ measures, stoking fears of a trade war escalation.
Beijing’s Giant Hydro Project Buoys China
Believers. China announced the construction of what would become the world’s largest hydropower dam in the east of the Tibetan Plateau at an estimated cost of $170 billion and capacity of 300 billion KWh/year, boosting Chinese construction stocks.
UK and EU Agree to New Oil Price Cap. The United Kingdom
has joined the European Union in setting the new price cap on Russian oil at $47.60 per barrel, to be adjusted automatically depending on future price movements, all the while price caps for refined products are kept unchanged.
Antimony Supply Plunges Despite Rare Earth Deal. China’s exports of antimony were down 88% in June compared to January, similarly to germanium that collapsed by 95%, as the resumption of China-US rare earth exports seem to have excluded two key minerals used in weapons production.
Turkey Eyes Full Energy Reset with Iraq. The Turkish
government announced the end of a decades-old agreement covering the transportation of oil along the Kirkuk-Ceyhan pipeline, submitting a draft proposal to Baghdad to renew and expand cooperation in the oil and gas sectors.
Cheaper LNG Weakens Coal in East Asia. One of the stalwarts of coal demand in Asia, the Philippines is set to record its first annual decline in coal-fired electricity output since 2008 as a 5.2% year-over-year increase in LNG consumption, reaching 10.4 TWh in H1 2025, affirmed the gas pivot.
UK Embattled Refinery to Close for Good. The United Kingdom’s 110,000 b/d Lindsey refinery that fell into insolvency late June following the bankruptcy of its operator Prax will be permanently shut down after no buyers were found for the plant, leaving Britain with only four operational refineries.
California Plans U-Turn on Oil Drilling. California governor Gavin Newsom is reportedly working with state legislators to ‘stabilize’ oil production in the Golden State after output collapsed to just 285,000 b/d in 2024, halving from a decade ago, seeking to expedite the permitting of new oil wells.
Trump Wants US Energy Involved in Syria. US energy firms Baker Hughes (NASDAQ:BKR), Hunt Energy and Argent LNG will
jointly develop a masterplan for rebuilding Syria’s embattled energy sector, seeking to counter Qatar’s $7 billion investment to boost Syrian power generation.
Mining Giant Quits Tanzania Project. Australia’s mining giant BHP (NYSE:BHP) has decided to divest its interest in Tanzania’s $1 billion Kabanga nickel project, according to operator Lifezone Metals
(NYSE:LZM), with the decision probably driven by an uncertain nickel market outlook.
Zinc Is Set for a Stellar July Rally. Benchmark LME three-month zinc
futures rose to their highest since March, surging past $2,840 per metric tonne, as more than half of the 118,225 tonnes held in LME-registered warehouses had been earmarked for delivery, drastically curbing availability.
Beijing Protests Against Canada’s Steel Tariffs. Chinese authorities expressed their indignation over Canada’s 25% tariff on steel imports from all countries containing steel melted in China, saying the move violates WTO rules and damages the two states’ June agreement to improve trade relations.
Blackouts Boost Gas Use in Spain. Spanish power generators doubled down on gas for electricity generation after a major blackout paralyzed the country on April 28, seeing a 6% year-over-
year increase in gas consumption in H1 2025, primarily led by a 40% increase in power demand.
· Diesel’s Bullish Run Continues as Gasoline Summer Boom Totters
BIMCO issues clause to tackle US fees on China-linked ships
- The Documentary Committee of the world’s largest shipping association, BIMCO, has adopted a standard clause aimed at addressing contractual uncertainties that may arise from the US Trade Representative’s notice of actions to impose fees on Chinese-related ships calling US ports.
- A BIMCO subcommittee comprising legal and commercial experts began working on the clause at the start of June, prioritising its development after the USTR announced actions to impose fees on Chinese-built, owned, or operated ships calling at US ports.
- According to the association, the notice of action will significantly raise the cost of seaborne trade to and from the US and add to regulatory challenges for the shipping industry.
- They are part of the USTR’s “Section 301 Investigation of China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance” and will also result in fees imposed on any car carrier built outside of the US.
- “We anticipate that many of the current uncertainties surrounding the enabling provisions to give the USTR notice its intended effect will be resolved in the months following the implementation of the USTR fees,” said Nicholas Fell, chairperson of BIMCO’s Documentary Committee.
Old panamax bulker gets new life as China’s offshore fish farm
- China has rolled out its largest ocean-going aquaculture vessel to date, completing the conversion of a panamax bulk carrier into a mobile fish farming unit for domestic operator Senhai MK.
- The vessel, Zhedai Yuyang 60001, was handed over by Shanhaiguan Shipbuilding, a unit of China State Shipbuilding Corporation (CSSC), after an extensive retrofit project in Hebei Province.
- Originally built in 1996 as a Panamax bulker, the 225-m-long ship has been modified to include seven large aquaculture tanks in place of its former cargo holds. The new configuration allows the ship to carry around 80,000 cu m of seawater, with a targeted annual harvest of 2,800 tonnes of fish, including species such as salmon.
- The reconfiguration provides housing for a crew of 30 and is set to operate mainly in the Yellow and East China Seas.
- While China has recently commissioned several purpose-built fish farm ships, this is the country’s first mobile aquaculture unit created through the conversion of an existing cargo vessel. Officials said the approach reduces construction costs by up to 70% per cu m of farming space compared to building new.
- The project was led by Senhai MK, also known as Senhai Mako (Zhejiang) Marine Science and Technology Co, in partnership with several design and engineering units under CSSC, including the 714th Research Institute and the China Ship Development and Design Center.
- With the delivery of Zhedai Yuyang 60001, Senhai MK has also confirmed plans to convert three additional capesize bulkers into similar mobile aquaculture units. These vessels are expected to further expand the company’s fish farming capacity as demand for offshore food production grows.
· Trump reduces Japan tariff to 15% from 25%, sending container lines’ stock surging
- US president says a trade agreement has finally been reached with Japan
- US President Donald Trump has reduced his tariff on Japan’s exports into the US to 15%, from the original 25% to be imposed on 1 August, sending a sigh of relief across the Asian nation.
- In a post on Truth Social, Trump said, “We just completed a massive Deal with Japan,” and in exchange Japan will invest
$550bn into the US, “at my direction”.
· Tariff confusion leading to one of worst years in history for US container imports
- Declining transpacific container volumes bodes ill for the wider container shipping sector
- Container volumes to the US are set to decline this year for only the third time in the history of container shipping, according to the McCown Report.
- US import volumes, accounting for around one quarter of the global total, dropped sharply for the second straight month in June.
- EU ports sound alarm as ETS pushes traffic toward transhipment rivals | European shipowners make their case for green fuel supply mandates | Putin orders vetting of vessels calling at Russian ports
BALTIC INDICES 22/07/2025
DRY INDEX: 2035 (+ 19)
CAPESIZE INDEX: 3061 (+ 80)
PANAMAX INDEX: 1909 (- 6)
SUPRAMAX INDEX: 1329 (- 17)
HANDYSIZE INDEX: 678 (+ 3)
BCI TC AVG $/DAY 25390 (+ 670)
BPI82 TC AVG $/DAY 17182 (- 50)
BSI TC AVG $/DAY 16805 (- 211)
BHSI TC AVG $/DAY 12203 (+ 53)
TIMECHARTER
‘Yasa Diamond’ 2021 84973 dwt dely Dalian 23 Jul trip via EC Australia redel India $15,000 – PCL
‘Themis’ 2012 81882 dwt dely aps EC South America 18/19 Aug trip redel Skaw-Gibraltar $26,000 – Bunge
‘Koroni’ 2011 81827 dwt dely retro Tomogashima 18 Jul trip via EC Australia redel Malaysia $13,500 –
Lestari
‘Sea Orpheus’ 2015 79520 dwt dely Fuzhou 23/24 Jul trip via Indonesia redel Philippines $14,000
‘Crystal Eternity’ 2024 63603 dwt dely Singapore prompt trip via Indonesia redel China $15,000 – Tongli
‘Great Pioneer’ 2015 63411 dwt dely Toledo prompt trip via Philippines redel China $17,000
‘Rubaiyat Hanif’ 2008 58713 dwt dely Sihanoukville prompt trip via Indonesia redel S China $14,000
‘Bao Express’ 2010 56810 dwt dely Singapore 22 Jul trip via Indonesia redel China $15,000
‘HP Atlantic’ 2013 56064 dwt dely Navlakhi 22/25 Jul trip via Arabian Gulf redel India $12,000 –
Graincompass kft PERIOD
‘Sakizaya Star’ 2020 82516 dwt dely Far East Sep 2 years redel worldwide index linked at 116% to BPI – cnr
‘Basic Sun’ 2024 81650 dwt dely Nagoya 1 Aug 11/13 months redel worldwide $15,500 – Louis Dreyfus –
<Scrubber benefit shared 50/50>
VOYAGES ORE
‘TBN’ 180000/10 Teluk Rubiah/Dung Quat 30 Jul/1 Aug
$5.65 fio 90000shinc/30000shinc – Vale – <21/7 fixture>
COAL
‘TBN’ 80000/10 Gladstone/Visakhapatnam 21/30 Aug
$17.10 fio 35000shinc/20000sshex – Sail
‘TBN’ 75000/10 Gladstone/Gangavaram 15/24 Aug
$16.35 fio 35000shinc/40000shinc – NMDC Steel
Baltic Exchange Index – 22 JULY 2025
Baltic Exchange Capesize Index 3061 (+ 80)
Route Description Value($) Change
| ====== =================================== | ====== | |||
| C2 | 160000mt Tubarao to Rotterdam | 11.350 + 0.493 | ||
| C3 | 160-170000mt Tubarao to Qingdao | 23.115 + 0.185 | ||
| C5 | 160-170000mt W Australia to Qingdao | 9.565 + 0.055 | ||
| C7 | 150-160000mt Bolivar to Rotterdam | 15.050 + 0.429 | ||
| C8_14 180000mt Gibraltar-Hamburg T/A RV | 30,000 + 1429 | |||
| C9_14 180000mt Conti/Med Trip China/Japan | 50,375 + 500 | |||
| C10_14 180000mt China/Japan T/P RV | 22,623 + 191 | |||
C14 180000mt China-Brazil RV 22,060 + 435
C16 180000mt N.China to Skaw-Passero 3375 + 750
C17 170000mt Saldanha Bay to Qingdao 17.167 + 0.256
========================================== ======
5TC Weighted Timecharter Average 25,390 + 670
Baltic Exchange Panamax 82500mt Index 22 JULY 2025 Baltic Exchange Panamax Index 1,909 (- 6)
Route Description Value ($) Change
====== ================================= =======
P1A_82 Skaw-Gib T/A RV 21,077 + 77
P2A_82 Skaw-Gib trip HK-SKorea incl Taiwan 26,565 + 40
P3A_82 HK-SKorea incl Taiwan, Pacific/RV 14,362 – 147
P4_82 HK-SKorea incl Taiwan to Skaw-Gib 8,779 – 14
P6_82 Dely Spore Atlantic RV 15,959 – 118
====== ================================= =======
P5TC Weighted Timecharter Average 17,182 – 50
The following routes do not contribute to the BPI or Weighted TC Average.
Route Description Value ($) Change
====== ================================= ======
P5_82 S. China Indo RV 14,986 – 139
P7 66000mt Mississippi Rvr to Qingdao 56,793 – 0.082
P8 66000mt Santos to Qingdao 40,779 – 0.346
Baltic Exchange Supramax Index – 22 JULY 2025 Baltic Exchange Supramax Index 1329 (- 17)
Route Description Value ($) Change
====== ========================================= ====
S1B_63 Cnkle trip via Med or Blsea to China-S.Korea 16,717 + 279
S1C_63 US Gulf trip to China-South Japan 25,868 – 1228
BS2_63 North China one Australian or Pacific RV 14,744 + 15
| BS3_63 S4A_63 S4B_63 BS5_63 | North China trip to West Africa 14,650 + 250 US Gulf trip to Skaw-Passero 26,261 – 1600 Skaw-Passero trip to US Gulf 12,232 – 125 West Africa trip via ECSA to North China 21,239 – 604 | ||
| BS8_63 | South China trip via Indo to EC.India | 17,371 + | 39 |
| BS9_63 | W.Africa trip via ECSA to Skaw-Passero | 17,218 – | 711 |
| S10_63 | S.China trip via Indonesia to South China | 14,419 + | 83 |
| S15_63 | Indian Ocean trip via S.Africa to Far East | 15,417 + | 9 |
| ====== | ========================================= ===== | ||
| S11TC | Weighted Timecharter Average 16,805 – 211 | ||
S10TC Supramax(58) Timecharter Average 14,771 – 211
Baltic Exchange Index – 22 JULY 2025 Baltic Exchange Handysize Index 678 (+ 3)
Route Description Value ($) Change
| ====== | ======================================== | ====== | |
| HS1_38 | Skaw-Passero trip Recalada – Rio de Janeiro 6,496 | + 3 | |
| HS2_38 | Skaw-Passero trip Boston – Galveston 8,600 + | 57 | |
| HS3_38 | Rio de Janeiro-Recalada trip Skaw – Passero 17,939 – | 150 | |
| HS4_38 | USGulf trip via USG or NCSA to Skaw-Passero 15,346 | – 18 | |
| HS5_38 | SE Asia trip to Spore – Japan 12,700 + 79 | ||
| HS6_38 | N.China-S.Kor-Jpn trip to N.China-S.Kor-Jp 12,025 + | 168 | |
| HS7_38 | N.China-S.Kor-Jpn trip to SE Asia 12,100 + 171 | ||
| ====== | ======================================== ====== | ||
7TC Weighted Timecharter Average 12,203 + 53
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