Tanker Report: India’s Inland Refinery Expansion Driving Exports

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  • India’s CPP exports are growing at the fastest pace since 2021, supported by expansions and upgrades to existing refineries rather than solely new mega projects.
  • Nearly 680kbd of new refining capacity is expected next year, mainly inland, which could boost short-term exports while domestic demand rises.
  • Coastal refineries may increasingly look overseas for customers as inland expansions shift domestic supply dynamics.
  • Rising domestic oil demand could gradually limit export growth, but crude imports will likely increase to support higher refining runs.

India’s clean petroleum product (CPP) exports have gained momentum this year, marking the fastest growth since 2021, as the nation ramps up refining capacity through expansions and upgrades rather than relying solely on new mega projects. With nearly 680kbd of additional capacity expected to come online next year—largely through inland facilities—India could see further export growth in the short term, even as rising domestic demand may gradually temper volumes, according to the report published by Gibsons.

Crude Oil Tanker Market Overview

The global crude tanker market showed a mixed but cautiously optimistic tone this week across key regions. In the East, the AG VLCC segment began slowly due to public holidays in China and Korea, with limited early enquiry keeping rates subdued. As the week progressed, increased activity in the Atlantic basin and stronger resistance from owners supported sentiment, with AG/China at WS922.5 and AG/West at WS56. 

The Indo region remained steady, benefiting from Vancouver exports and maintaining balanced TCEs around $12,000/day above TD14, while Indo/Oz was assessed at 80 x WS125. West Africa saw modest enquiry early in the week, but thinning tonnage lists and rising numbers in adjacent markets lifted VLCC rates to WS90 for WAF/East and WS95 for WAF/UKC. Suezmaxes showed slight pressure but held around 130 x WS105 for TD20, with confidence growing among owners. In the Mediterranean, TD6 dropped slightly to 135 x WS140, while Aframax rates climbed steadily to WS160 amid firming demand and seasonal factors. 

Across the Americas, the US Gulf VLCC market strengthened following private deals, with USG/China at $10.5m and Brazil/China at WS87.5, while the North Sea saw tighter lists and weather-related replacement activity pushing owners to target mid WS140s. Overall, fundamentals suggest cautious optimism with upside potential as enquiry levels continue to firm globally.

Clean Products Tanker Market Update

The clean products tanker market displayed mixed activity across regions this week, with a cautious but optimistic tone among owners in several areas. In the East, the AG MR sector saw a tightening of the front-end list, though rates held steady at 35 x WS175 for TC17 and 35 x WS125 for TC12, with potential for small gains as weekend cargoes awaited cover. In the UK Continent, a surge of 30+ vessels in the next five days put pressure on MR rates, with TA called around 37 x WS105, while Handies faced softening freight amid slower enquiry and competition from MRs, holding at 30 x WS150-155 for XUKC. 

In the Mediterranean, MR rates improved five points to 37 x WS120 Med-TA, supported by sparse lists and strong USG/TA levels, while Handy owners enjoyed a positive week, moving from WS130 to 30 x WS150-155 due to tight supply and steady enquiry. Looking ahead, rates could see minor corrections if the weekend restocks lists, but continued fresh cargoes may help maintain or push levels higher.

Dirty Products Tanker Market Overview

The dirty products tanker market experienced a steady but selective week across key regions. In the North, Handy activity started quietly with prompt units being fixed at last done levels, before fresh enquiry on Thursday reduced available tonnage and pushed rates up to WS225, with early next week expected to see further firming. In the Mediterranean, Handies saw a similar pattern, beginning at WS210 before softening to WS205-200, though levels are expected to hold as prompt tonnage is clipped from the list. North European MRs remain in short supply, with non-USTR Compliant Panamaxes providing some relief, and UKC fixtures around 45 x WS160 reflecting a firming trend. In the Med, MRs tested WS150-155, with further gains contingent on early enquiry next week. Panamaxes had a quiet week, with under-the-radar fixing nudging TD21 slightly below WS150, as owners anticipate continued market support heading into the new week.

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Source: Gibsons