COMMODITY TRACKER: 5 charts to watch this week
S&P Global (04/11/2025) - Indian Oil Corp. is set to source Russian crude from non-sanctioned entities to comply with US and EU sanctions. Concurrently, Indian renewable energy credit prices have fallen ahead of the COP30 conference, while Asian VLCC freight rates increased significantly.
1. Indian Oil navigates Russian crude sanctions
Chart 1: https://www.spglobal.com/content/dam/spglobal/ci/ccp/95321fc2-b090-11f0-b54c-35dbe8bd8d43.svg
What's happening? Indian Oil Corp. will continue to buy Russian crude but only from non-sanctioned entities, the company's finance director Anuj Jain said Oct. 28, adding that this would help the state-run refiner meet the obligations of US and EU sanctions.
What's next? Leading Indian refining sources and oil industry officials have recently told Platts, part of S&P Global Commodity Insights, that Indian refiners are likely to hold off on new Russian crude import deals due to US sanctions on Rosneft and Lukoil. But flows are unlikely to come to an abrupt halt, as sourcing alternative feedstock for existing volumes could pose a significant challenge, Indian refining sources said. India is studying the impact of US sanctions on Russian crude companies and will closely observe how market dynamics unfold in global oil trade, Randhir Jaiswal, the foreign ministry's spokesperson, said Oct. 30. Jaiswal said India's energy policy would be driven by the energy security needs of its 1.4 billion population.
2. India renewable energy credit prices hit record low
Chart 2: https://www.spglobal.com/content/dam/spglobal/ci/ccp/d08b1fa0-b893-11f0-be02-27e926b722bf.svg
What's happening? Platts' assessment for renewable energy credits from India hit a record low of 65 cents/metric ton CO2e on Oct. 31, down from $1.30/mtCO2e a year earlier, reflecting a 50% year-over-year decline. This drop, as attributed by an India-based trader, is due to sluggish buying interest and mounting supply pressures, with total issuances in September increasing by over 251% month over month, reaching more than 7 million credits, Platts data showed. Issuances from Verra and Gold Standard also rose.
What's next? Market participants will be watching the UN Climate Change Conference, or COP30, in Brazil. However, expectations for a significant recovery remain muted among market participants due to typical year-end slowdowns. While Indian buyers are the primary demand source, European buyers are exploring cheaper alternatives like Turkish credits, according to an India-based trader.
3. Shipowners' profile FuelEU compliance costs against abatement
Chart 3: https://www.spglobal.com/content/dam/spglobal/ci/ccp/f0602576-af4e-11f0-a3cf-bb5bb4221783.svg
What's happening? The International Maritime Organization's decided to adjourn the Marine Environment Protection Committee meeting for a year. The adjournment was supported by 57 countries, with 49 opposing and 21 abstaining. This decision could lead to countries like the UK, EU, China, Turkey, and the African Union developing their own emissions trading systems, according to Albrecht Grell, managing director of maritime analytics firm Oceanscore.
What's next? With the delay of the IMO's decision on the ratification of the Net-Zero Framework, shipowners are now turning their attention to the EU's FuelEU Maritime compliance strategies. According to Grell and a LinkedIn post by maritime decarbonization company Carbonleap, shipowners will be calculating what compliance surplus under FuelEU they want to bank, along with what they can push to their pools for trading.
4. Uptick in Indonesian palm oil supply weighs on prices
Chart 4: https://www.spglobal.com/content/dam/spglobal/ci/ccp/c8a604cc-b973-11f0-a883-51998482c24c.svg
What's happening? Indonesia, the world's largest palm oil producer and exporter, could see production rise by 10% to around 56 million metric tons in 2025 due to favorable weather, according to the Indonesian Palm Oil Association, or Gapki. The forecast by Gapki came at a time when the second-largest producer, Malaysia, is also seeing a rise in palm oil production. Growing supply from the two countries, along with slower demand from key destinations India and China, has pressured market prices to a three-month low. Platts assessed crude palm oil FOB Indonesia at $1,092.5/mt Nov. 3.
What's next?Erratic weather patterns have caused palm oil to make seasonal highs around November or December, Athena Tradewinds, an India-based agri-commodity trade group, said Oct 28. Market participants are also waiting for cues on Indonesia's biodiesel policy. If Jakarta firms up a date for its planned increase of its palm-oil-based biodiesel blending mandate to 50% from the current 40%, much of the additional supply could be absorbed domestically, supporting prices, according to Tushar Agarwal, an India-based vegetable oil analyst.
5. Asian VLCC freight rates hit record highs
Chart 5: https://www.spglobal.com/content/dam/spglobal/ci/ccp/c9589cea-b973-11f0-b1d8-d723eaa34b67.svg
What's happening? Asian VLCC freight rates have reached their highest levels since the post-COVID recovery, driven by congestion at Chinese ports and increased loading demand, which have slowed fleet turnaround and tightened regional tonnage availability, according to industry sources. This surge in rates pushed the cost of transporting crude from the Persian Gulf to China to $29.39/mt on Oct. 30, according to Commodity Insights data. The Platts Global VLCC Index for a non-eco VLCC was assessed at $112,538/day on Nov. 3.
What's next? The VLCC market is expected to remain tight due to several factors, according to Commodity Insights Shipping Analyst Kevin Zhao, including the doubling of the number of anchored VLCCs at Chinese ports. This has exacerbated congestion and significantly reduced available tonnage.