This week's chart highlights the declining trend in the quarterly volume of dirty oil flows to China for the second quarter of this year, primarily driven by a slowdown in Russian oil exports compared to last year's record pace. In contrast, Saudi Arabia has maintained a strong pace, with quarterly volumes not falling below last year's levels. In early March, Signal noted a strengthening momentum in market rates for the VLCC-AG China route, which did not last. However, this trend may firm up as the quarterly volume of dirty oil shipments from Saudi Arabia stabilises.

In the first half of May, there was a weakening trend in dirty freight rates for the VLCC AG-China market, along with a significant downward revision on the Aframax Med route. On the demand side, the growth in dirty and clean tonne days has yet to show an increasing pace. Consequently, the supply of vessels will play a critical role in maintaining the robust environment for dirty and clean freight rates in the coming days.

On the macroeconomic front, Russia is expected to meet its oil production quota in June after exceeding its target output under the OPEC+ deal in May, the Russian Energy Ministry announced on Thursday. According to the ministry, Russia slightly surpassed its OPEC+ quota in May, based on data from independent sources monitoring the agreement. The ministry added that "the issue with overproduction will be resolved in June, when the target will be achieved." The excess production volumes since April will be fully compensated for in the future, with the overproduction offset during the compensation period until the end of September 2025. The ministry also reiterated that "Russia remains fully committed to the fundamental principles of the OPEC+ deal."