Saudi Aramco published its Q1 2024 results which showed net income down to $27.3bn from $31.9bn a year earlier. Aramco is investing mostly in gas, renewables and downstream as Saudi Arabia tries to reorientate its national budget away from oil revenues. Despite Saudi Arabia’s efforts to reduce OPEC output to support oil prices, the rise in non-OPEC output, particularly in the Americas, is holding prices down even as geopolitical tension rises. Aramco can produce about 12m barrels per day but its long-term average production rate is 8.5m barrels per day. Aramco’s average realised oil price in Q1 was $83, only $2 up on a year earlier despite OPEC+ cutting over 2m barrels per day of production in that time. According to Simon Watkins, an oil analyst and author, Saudi Arabia has a fiscal breakeven price closer to $96. Adding barrels of output would be good for tanker demand but disastrous for Saudi Arabia’s modernisation plans. The OPEC basket price remains synthetic (in other words fixed by producers as much as by the market) and this plays into the hands of non-OPEC competitors particularly in the US. WTI was around $80 per barrel on May 18, up from lows of closer to $78. Meanwhile, Russian crude and products exports are being dented by the Ukrainian drone offensive on oil installations. Oil traders are not exactly scrambling for barrels but it is notable, for instance, that Venezuelan and Iranian sour crudes are in strong demand while sanctions are lifted. In the oil freight markets, the outturn is good for crude oil tankers and even better for products tankers. The BDTI averages 1,234 points so far this year compared to 1,150 for calendar 2023, and the second half of the year is usually seasonally stronger than the first. The BCTI averaged 802 points in 2023 and 1,033 so far this year, with a similarly stronger second half to anticipate. During May, average daily hire for VLCCs basis the Baltic Exchange rose to an average of $48,000 a day with the trend exceeding $52,000 by May 18. That makes this the best May since 2020 as traders stocked up on VLCCs to store oil during the pandemic. Under normal circumstances this is the best May since 2015 when rates averaged $51,000 a day while China was filling its newly completed strategic petroleum reserve. According to the Baltic Exchange, VLCC day rates from the Middle East to China were $52,477 on May 18, while rates from the US Gulf to China were $52,268 on the same day – but the voyage from the US Gulf takes up to an extra 10 days, soaking up tonnage and providing a larger lumpsum to owners. The optimism is palpable as owners pay up to acquire secondhand VLCCs, with the latest deal said to be Bahri buying four Korea Line VLCCs of four to five years old for something above $110m each, well above their probable newbuilding prices. Average suezmax earnings in May to the 18th were $40,346 after $41,926 in April. Rates on West Africa to Europe have varied in a range $3,000 either side of $40,000 per day while Mediterranean suezmax rates have been lower, in a narrower range of $37,000 to $38,000 per day. Average aframax daily hire has fared better, being $42,536 for the first 18 days of May compared to $42,165 for April. Rates from Singapore to Australia improved by 16% from $34,689 at the end of April to $40,184 on May 18. On the cross-Med route, following Libya’s recent agreement with the US, rates picked up by a quarter from $51,216 to $63,494 over the same dates. From Kuwait to Singapore, rate