Tanker Market: Is an Oil Supply Glut on the Cards?

Summary

Shipbroker Xclusiv’s weekly note highlights shifting crude flows and the risk of a year-end supply surplus that could pressure prices and freight markets. Key datapoints: Russian seaborne exports were about 3.40 million b/d in August, with India and China accounting for more than 70% of flows but trading in opposite directions — Indian shipments fell sharply while Chinese imports rose. Washington’s new 25% secondary tariffs on Russian crude to India, wider discounts on Urals, and OPEC+ decisions about unwinding production cuts together raise the prospect of a fourth-quarter oil glut. That glut could push Brent below $60/b and impact tanker demand, voyage distances and the employment of older vessels in the shadow fleet.

Key Points

Russian seaborne crude exports: ~3.40 million b/d in August, slightly up from July but below spring peaks.
India’s imports plunged ~21% in August (to ~1.30 million b/d) from March highs, partly due to US 25% secondary tariffs announced on 27 Aug.
China increased imports ~12% in August (~1.11 million b/d), becoming a larger share of Russian flows.
Europe and Africa have taken modest incremental Russian barrels, showing rerouting despite restrictions.
Wider discounts for Urals (over $11.50/b vs dated Brent) suggest Russia may deepen price concessions to keep flows moving.
OPEC+ has been adding back supply (~2.2 million b/d since April); with fading seasonal demand there is risk of an end‑year surplus (forecast: 108.3m b/d supply vs 105.3m b/d demand in December).
For tankers: reduced Indian demand shortens long haul tonne‑mile voyages, while more China/EU/Africa liftings fragment trade and may increase the number of liftings—mixed implications for freight and S&P markets.
Older vessels in the shadow fleet remain busy on Russia‑linked trades, but wider discounts and diversified buyers could further stretch available tonnage and affect mainstream owners if oil prices tumble.

Context and Relevance

The article matters to shipowners, traders and charterers because crude routing and price dynamics directly change tanker demand patterns and voyage lengths. The combination of geopolitical policy (US tariffs), price discounts on Russian crude, and OPEC+ production choices creates uncertainty: either tighter markets if cuts are extended, or a supply glut that drags both oil prices and freight rates down. In the short term, fragmented trades and additional liftings could support some S&P activity and employment for older tonnage; in a price collapse scenario, mainstream owners face downside risk.

Why should I read this?

Quick version: it explains who’s buying Russian oil, why flows are shifting, and what that means for tanker voyages and freight rates. If you follow tanker markets, trading or chartering, this saves you the legwork — and flags the big risk: an autumn/winter surplus that could send prices and freight south fast. Worth a skim if you want to stay ahead of rerouting and tonne‑mile changes.