Episode 62: US-China tensions re-ignite at a bad time for oil

In this episode of Trade with Conviction, a Sparta podcast, the hosts examine how escalating geopolitical tensions between the US and China are shaping the oil markets. They explore how trade disruptions are influencing freight rates, the impact of recent sanctions on Chinese crude imports, and the current outlook for gasoline and refining margins across Asia. The discussion also delves into crude market dynamics and wraps up with quickfire insights on key market trends, underscoring the need to stay informed in an increasingly volatile landscape.

Key Takeaways: 

> How US-China trade tensions are reshaping freight markets for now.

> Why sanctions could disrupting crude imports into Asia.

> Refining margins are still high, but does that matter?

> Quickfire market updates from our analysts

Chapters: 

(00:49) US China Trade Dynamics and Freight Impacts Neil, June, and Michael break down how renewed US China trade tensions and new port fees are reshaping freight costs, tanker routes, and shipping market behavior. They also discuss why Chinese-built vessels could be the surprise winners.

(05:07) Market Reactions to Sanctions and Regulations June explains how the latest US sanctions on Chinese crude terminals and refineries are disrupting trade flows. The team examines short-term volatility, potential refinery run cuts, and how these measures could influence OPEC’s next moves.

(09:09) Crude Market Analysis and Regional Disparities Neil dissects the IEA’s forecast of a major oil glut and what it means for supply dynamics. The group debates whether OPEC will defend market share or reverse course and how regional price spreads reflect growing global imbalances.

(10:46) Freight Market Overview and Future Predictions Michael shares insights into tightening VLCC availability and shifting freight fundamentals. The discussion covers US Gulf Coast vessel shortages, rising inefficiencies, and how market structure is evolving across key tanker routes.

(12:11) Gasoline Market Analysis Neil and Michael assess EBOB strength, East West spreads, and competing ARBs between the US and Europe. June adds context on blending margins and freight trends, outlining what refiners should watch in the weeks ahead.

(17:50) Refinery Margins in Asia June explores why Asian refining margins are holding up despite unplanned outages, Chinese export limits, and regional turnarounds. Neil adds perspective on the recent dip in US distillate cracks and what it signals for global refining.

(20:52) Crude Analysis Neil highlights the widening gap between West African weakness and Brent resilience, explaining how cheap AG barrels and soft Chinese demand are reshaping crude trade flows. The team discusses the implications for North Sea pricing.

(26:36) Quickfire Round Market Insights and Predictions June and Michael deliver fast updates on key market shifts — from propane undercutting naphtha in steam crackers to freight spreads tightening across the Atlantic — plus what to watch for next week’s trading outlook.