Donna Dong
Research Analyst, Flux
Brent Eases to $71.69/bbl
Brent slips as UK hits Transneft; tanker rates surge, India import reliance grows, US tariffs take effect.
The Apr’26 Brent futures contract has eased this morning, from $72.15/bbl at 05:45 GMT to $71.69/bbl at 10:00 GMT (time of writing).
In the news, Britain has sanctioned Russian oil pipeline operator Transneft as part of a package of almost 300 measures. The government highlighted Transneft as responsible for over 80% of Russia's crude exports and aims to further diminish Moscow's energy income. Foreign Minister Yvette Cooper stated that the UK has taken decisive action to disrupt Russia's critical financial, military, and revenue streams that support its war with Ukraine. These new measures increase the total number of sanctioned individuals, companies, and ships under Britain's Russia-related sanctions to over 3,000. Additionally, the package includes 48 oil tankers identified to restrict Russia's so-called "shadow fleet." Elsewhere, the cost of shipping oil has risen to its highest level in six years, driven by increased crude exports from the Middle East as traders rush to secure charters amid potential military conflict between the US and Iran. Vessel tightness due to Western sanctions have further bolstered prices. According to LSEG data, the cost to hire a VLCC to transport up to 2mb from the Middle East to China has more than tripled since the beginning of the year, reaching over $170kb/d on 24 Feb – the highest rate since April 2020. In India, data from the country’s Petroleum Planning & Analysis Cell shows that the total share of oil imports reached 88.6% over the first 10 months of the current fiscal year (which ends on 31 March). Despite government support, India has struggled to decrease its dependence on crude imports. In geopolitical news, US President Trump’s new global tariffs have come into effect at 10%, despite his pledge of a 15% rate. The executive order signed details a temporary import duty to “address fundamental international payments problems and continue the Administration's work to rebalance our trade relationships to benefit American workers, farmers, and manufacturers". Finally, at the time of writing, the front-month (Apr/May) and 6-month (Apr/Oct) spreads are at $0.36/bbl and $3.04/bbl, respectively.
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