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Rates of supertanker shipping are rising sharply due to the US-China trade conflict that has engulfed ports
The supertanker rates have risen this week, and they are likely to remain high due to the U.S. and China titling-for-tat increases in port fees as well as concerns over the impact of U.S. sanction on a Chinese major crude oil terminal. According to traders, the Chinese port fees announced Friday would increase shipping costs by more than $7 per barrel for a Very Large Crude Carrier that is linked to the United States. This would amount to around $15 million, which would discourage anyone from chartering vessels linked to the United States. The VLCC spot rates for the Middle East-China route, also known as TD3C LSEG data shows that on Monday,, reached a new two-week high of W98 in the Worldscale Industry Measure used to calculate freight rate. Shipbrokers reported that on Wednesday the price had fallen to W95, or about $6,2 million in lump sum. It is still much higher than the W70 levels from a week earlier. CHINESE RETALIATION China's announcement that it would charge its own port fees to vessels linked to the United States sparked a rise in rates. This was in response to U.S. port rate hikes announced earlier this year for Chinese ships. Beijing subsequently announced that Chinese-built vessels would be exempted. The two sets of levies came into effect on Tuesday. The rates have indeed increased as the number of available tankers that meet the criteria for avoiding the high loadport fees has decreased, said June Goh a senior analyst in the oil market at Sparta Commodities. She added, "However since China has now exempted China-made vessels, there is some reprieve here." A shipbroker who refused to be identified due to the company's policy said that owners of tankers from countries other than the United States might request a premium, which could drive freight rates up. Clarksons Research estimated that after China exempted Chinese built ships, about 12% (or 12 million crude tankers) of the world’s fleet would be subject to China’s port fees. RIZHAO Port Sanctions Traders said that the U.S. sanctions imposed on Friday on Shandong’s Rizhao Oil Terminal has forced trading companies to divert ships to Zhoushan on China's East Coast, where they could cause congestion at Zhoushan's transfer hub, which is linked to major Sinopec refining plants and mega refiner Rongsheng Petrochemical. Brendan Bos is a market analyst with Gibson Shipbrokers. He said that the sanctioning of Rizhao oil terminal contributed to the volatility of freight in the East. Bos stated that "it has already resulted in greater trade inefficiency as several VLCCs diverted. However, it is likely that there will be new outlets for crude oil and that its impact on the medium term will be mitigated." The U.S. Treasury listed the Rizhao Shihua crude oil terminal, which is half owned by a Sinopec logistic unit, in a series of sanctions, including ships that transport Iranian crude and liquefied petrol gas. The shipbroker, who refused to identify himself, said that the number of VLCCs required to transport cargoes to Asia from the Middle East and Europe, Africa, the U.S., and Africa is likely to increase in October compared to September. This will drive up freight rates. The current TD3C rate is not far from the more than two-year highs reached in September around W108, when tanker supplies tightened due to an increase in Middle East exports and increased arbitrage supplies into Asia.
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Honeywell's Aerospace Supply Chain Improvements in Electronics for Planes
Honeywell's senior executive said that the production of electronic components for aviation was a bright spot within the aerospace supply chain. However, manufacturing some parts remains challenging. Honeywell and other major aerospace suppliers have recently pointed out signs of improvement to the supply chain. Honeywell provides avionics, flight control systems, and ground-based units for airlines, as well as avionics, flight control, and Chinese planemaker COMAC. The International Air Transport Association (IATA), which represents airlines, said that the industry continues to be plagued by shortages in labor and materials such as aluminum, steel, and superalloys. Airlines have faced an extra cost of more than $11 Billion due to supplier disruptions. Ben Driggs, Honeywell Aerospace's Chief Commercial and Strategic Officer, said in an exclusive interview with Reuters on Friday that products such as avionics or navigation equipment are the areas of the supply chain where the improvement is most noticeable because they rely less on raw materials. Driggs stated that the biggest improvements have been in avionics and satellite communications. He added that the material was less restricted in terms of raw materials, but did not name it. The supply chain has been struggling to keep up with the growth of all three segments in the aerospace industry: commercial aviation, business aviation, and defense. Driggs stated that other parts of supply chain, including engines for private planes, were also improving but not at the same rate as electronics. Willie Walsh, IATA's CEO, has questioned whether large suppliers have influence over prices. He cited a difference between airline operating margins (forecast at 6.7% for this year) and margins that some engine manufacturers and suppliers enjoy in the mid-20% area. Honeywell's Aerospace division reported a margin of 25,5% in the second quarter. Driggs refused to comment on airline margins but stressed that it is important for suppliers and airlines to work together. Honeywell announced in February that it would split into three separate companies. This included a spinoff of the aerospace division. (Reporting and editing by Jamie Freed in Montreal, Allison Lampert)
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Waymo will launch an autonomous ride-hailing system in London next year
The robotaxi company said that Alphabet Waymo will launch its driverless ride-hailing services in London by 2026 as part of its plans to expand to other major cities. Waymo has been growing slowly and steadily in the United States over the past few years despite the tough regulations and expensive technologies. It is now gaining momentum through partnerships with ride hailing platforms and fleet operators, at a moment when Tesla is rolling its long-promised roboticaxi service out in the United States. Waymo began collecting data and testing human-driven vehicles in Tokyo earlier this year. They worked with Nihon Kotsu, a Japanese taxi company, and Go, a mobile taxi app. Waymo has announced that it will work with the vehicle finance firm Moove to prepare for its rollout. It is also actively engaging local and national regulators in order to obtain necessary approvals. Waymo's vehicles are on their way to London where safety drivers will begin testing the vehicles prior to fully autonomous operations beginning next year. Waymo provides more than 250.000 paid trips per week in cities like San Francisco, Los Angeles and Phoenix, Arizona. Waymo and Moove have partnered to manage Waymo's fleet operations, charging infrastructure and facilities in Phoenix, and Miami, Florida, next year. Uber, the ride-hailing company that offers Waymo cars on its app in Atlanta, Austin and other cities, announced plans in June to test fully driverless rides from spring 2026 in the UK through its partnership AI startup Wayve. Due to accidents, recalls, and federal investigations, it has been difficult for the U.S. to commercialize autonomous vehicles. Reporting by Kritika lamba in Bengaluru, and Abhirup roy in San Francisco. Editing by Leroy Leo, Lincoln Feast and Lincoln Feast.
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Rates of supertankers are rising sharply due to the US-China trade conflict that has enveloped ports
The supertanker rates have risen this week, and they are likely to remain high due to the U.S. and China titling-for-titling increases in port fees as well as concerns over the impact of U.S. sanction on a major Chinese crude terminal. According to traders, the Chinese port fees announced Friday would increase shipping costs by more than $7 per barrel for a Very Large Crude Carrier that is linked to the United States. This would amount to around $15 million, which would discourage anyone from chartering vessels linked to the United States. The VLCC spot rates for the Middle East-China route, also known as TD3C LSEG data shows that on Monday,, reached a new two-week high of W98 in the Worldscale Industry Measure used to calculate freight rate. Shipbrokers reported that on Wednesday the price had fallen to W95, or about $6,2 million in lump sum. It is still much higher than the W70 levels that were seen a week earlier. CHINESE RETALIATION China's announcement that it would charge its own port fees to vessels linked to the United States triggered the rise in rates. This was in response to U.S. port rate hikes announced earlier this year for Chinese ships. Beijing later announced that Chinese-built vessels would be exempted. The two sets of levies came into effect on Tuesday. The rates have indeed increased as the number of available tankers that meet the criteria for avoiding the high loadport fees has decreased, said June Goh a senior analyst in the oil market at Sparta Commodities. She added, "However since China has now exempted China-made vessels, there is some reprieve here." A shipbroker who refused to be identified due to the company's policy said that owners of tankers from countries other than the United States might request a premium, which could drive freight rates up. Clarksons Research estimated that approximately 15% of the global crude tanker fleet will be subject to China's fees for vessels associated with the U.S. This estimate, made on October 12, was before China exempted Chinese built ships. RIZHAO Port Sanctions Traders said that the U.S. sanctions imposed on Friday on Shandong’s Rizhao Oil Terminal has forced trading companies to divert ships to Zhoushan on China's East Coast, causing congestion at Zhoushan's transfer hub, which is linked to major Sinopec refining plants and mega refiner Rongsheng Petrochemical. Brendan Bos is a market analyst with Gibson Shipbrokers. He said that the sanctioning of Rizhao oil terminal contributed to the volatility of freight in the East. Bos stated that "it has already resulted in greater trade inefficiency as several VLCCs diverted. However, it is likely that there will be new outlets for crude oil and that its impact on the medium term will be muted." The U.S. Treasury listed the Rizhao Shihua crude oil terminal, which is half owned by a Sinopec logistic unit, in a series of sanctions, including ships that transport Iranian crude and liquefied petrol gas. The shipbroker, who refused to identify himself, said that the number of VLCCs required to transport cargoes to Asia from the Middle East and Europe, Africa, the U.S., and Africa is likely to increase in October compared to September. This will drive up freight rates. The current TD3C rate is not far from the more than two-year high reached in September around W108, when the supply of tankers tightened due to an increase in Middle East exports and increased arbitrage supplies into Asia.
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Russian strikes knockout power in Ukraine
The Ukrainian Energy Ministry reported on Wednesday that Russia had struck Ukraine's power infrastructure overnight with drones, cutting off electricity in several areas, including the central Dnipropetrovsk area. Ukrenergo, the operator of Ukraine's power grid, said that electricity supplies were restricted in seven areas. The majority of these regions are in eastern Ukraine. Naftogaz, the state-owned gas company, said that a thermal plant was hit without naming it. In recent weeks, Russia has intensified its attacks against the Ukrainian energy infrastructure. This includes both gas and power plants. Naftogaz reported that the Russians attacked gas installations three times in the last seven days. These included "critically-important facilities" located in Kharkiv and Sumy regions, as well as Chernihiv. Svitlana Svitnychuk, the Ukrainian energy minister, said in a statement earlier this month that Ukraine Want to Increase After Russian airstrikes against its gas infrastructure, it has increased its gas imports 30%. Reporting by Pavel Polityuk Editing Peter Graff
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Hungary criticizes EU energy policy in Moscow
Budapest's Foreign Minister said that Hungary would suffer from being cut off from Russian Energy during a trip to Moscow on Tuesday. He reiterated the fact that Hungary will not be influenced by outside forces when making decisions about its energy supply. Peter Szijjarto attended the Russian Energy Week Forum as NATO Defence Ministers met in Brussels for a discussion on military aid to Ukraine. This highlighted Budapest's differences from most other alliance members when it comes dealing with Moscow. Hungary's continued reliance on Russian Energy since Moscow invaded Ukraine has prompted criticism from several European Union allies and NATO members. Szijjarto said to reporters in Moscow that Budapest's national interests were paramount when it comes to energy supply. "We never felt let down by Russia." Deliveries have always been made... Contracts are always honored. "My question is why we should end this relationship", Szijjarto replied. Hungary has rejected plans by the European Commission that would phase out all EU imports of Russian gas, including liquefied gas, by 2027. This deepens a rift between Brussels and Moscow over the relationship with Moscow. Hungary has signed a 15 year deal with Russia in 2021 to purchase 4.5 billion cubic meters of gas per annum. Last year, Hungary increased its purchases from Gazprom, importing 7.5 billion cubic meters of Russian gas through the Turkstream pipeline. Moreover, the country imports a large amount of crude oil from Russia through the Druzhba Pipeline that runs through Belarus, Ukraine and Hungary to Slovakia. JANAF, a Croatian pipeline operator, also transports crude to MOL's Hungarian refineries. Szijjarto stated that "Brussels wants to cut one (pipeline) under the concept of diversification." How can you think that having two pipelines is safer than one? "This is insane," said he. Last month, U.S. president Donald Trump announced that he would ask Hungary to stop purchasing Russian oil. This was part of an effort to pressurize NATO allies into cutting energy ties to Moscow due to its war in Ukraine. Hungarian Premier Viktor Orban has said that Hungary's economy would suffer if it stopped using Russian energy. (Reporting and writing by Olesya Almakhova and Vladimir Soldatkin, Writing and editing by Lucy Papachristou, Anita Komuves and Andrew Osborn)
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Local police report that 10 people were killed when an oil tanker in Indonesia caught fire.
According to local police, at least 10 people died and 18 were injured when an oil tanker caught on fire in Indonesia's Riau Islands Province early Wednesday morning as it was being fixed. Zaenal Arifin, chief of the local police, said that a fire broke out at a shipyard located in Batam at 4 a.m. (2100 GMT) on Tuesday. Batam is about 20 kilometers (12.4 miles), or by sea, away from Singapore. Arifin stated that MT Federal II caught fire while docked for repairs. The cause of the fire is still under investigation, and the ship did not carry oil. Arifin reported that as of Wednesday afternoon, 10 victims had died, and 18 more were being treated in hospital. All the victims were working on the vessel to repair it. Arifin stated that "some of them were severely injured". He said that he did not know who owned the boat. In Batam, an ill-fated vessel caught fire while being repaired in June. Four people were killed and nine injured. Local police in that case have identified two suspects who they believe violated safety standards. (Reporting and editing by Thomas Derpinghaus; Ananda Teresia).
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The diverting of tankers from a Chinese terminal sanctioned may cause congestion in other ports
According to trading sources, at least five crude oil tankers have been diverted from a major eastern Chinese port after the U.S. imposed a ban on an import terminal on Friday. U.S. sanctions disrupted plans by the country's refining companies to unload cargoes in the port of Lanshan, the hub for refinery activity in Shandong Province. The diverting of the ships could also lead to congestion in alternative ports. This is especially true at Zhoushan located further south, off the coast Zhejiang Province, where multiple ships have been redirected. The U.S. sanctioned the Rizhao-Shihua Crude oil Terminal in Lanshan on Thursday for receiving Iranian crude oil aboard sanctioned vessels. Sinopec Kantons Holding is a subsidiary of Sinopec and also known as China Petroleum and Chemical. According to analysts and industry executives, one-fifth (or a fifth) of Sinopec’s crude oil imports passes through the Rizhao Schihua Terminal. Chinese refiners responded by moving their ships away. Unipec is the trading arm for Sinopec Asia's biggest refiner. Over the weekend, it diverted its Very Large Crude Carrier New Vista to Ningbo or Zhoushan where they are currently waiting to unload their cargo. Unipec diverted a VLCC carrying 2,000,000 barrels of Omani oil to Zhoushan for an arrival date on October 21. Data from LSEG & Kpler confirmed this. Zhoushan, an archipelago located south of Shanghai, is linked to Sinopec’s eastern Chinese refineries by pipelines. LSEG data revealed that two more vessels, the VLCC Spherical, and the Suezmax Fulger which can transport up to one million barrels oil, will also be heading to Zhoushan. A shipping source stated that it's not clear if the Spherical will discharge its 2 million barrels Brazilian crude at Zhoushan, as they are still waiting for orders. Data showed that the Fulger, which is carrying approximately 1 million barrels Egyptian Arco crude oil, will discharge at Zhoushan, on October 19. The charterers of the Spherical & Fulger were not immediately known. LSEG data revealed that the VLCC Habshan chartered by CSSA - the shipping arm for French energy giant TotalEnergies - has changed its destination from Rizhao to Tianjin. It is expected to arrive on October 26. Data from LSEG & Kpler shows that the VLCC carries about 2,000,000 barrels of Congolese Djeno Crude. Sinopec’s largest subsidiary refinery, Tianjin Petrochemical, is located in Tianjin. Sinopec also operates an oil reserve from this city. TotalEnergies and Sinopec didn't immediately respond to comments. Sinopec Kantons stated on Monday that they expect their business to be affected by the sanctions.
Royal Mail fined $28 Million by UK regulator for failing to meet delivery targets
The UK's telecom and Media regulator fined Royal Mail on Wednesday 21 million pounds ($28,1 million), the largest penalty it has ever imposed on a post and parcel group for failing to meet delivery targets in 2024-25.
Royal Mail has tried to modernize its operations in order to increase volumes. Ofcom has also revised some of their targets to avoid delays.
Since at least 2007, the group has failed to meet its delivery targets. Ofcom has fined the company 5.6 million pounds in 2022-23, and 10.5 millions pounds in 2023-24. This is their third annual penalty. Royal Mail was not penalized by the regulator during the COVID-19 epidemic.
Ofcom warned on Wednesday that Royal Mail will continue to levy the charges unless they improve.
In a statement issued by Ofcom's director of enforcement, Ian Strawhorne said that "millions of important letters" are being delivered late and the people are not getting what they paid for when buying a stamp. He added that these failures are "unacceptable".
Royal Mail issued a statement acknowledging the decision of the regulator and stating that the changes made to the "Universal Service Model" as part of a pilot program have had positive results.
Royal Mail was owned by International Distribution Services. This company became private following its acquisition by Czech billionaire Daniel Kretinsky.
(source: Reuters)