The global shipping market closes out 2025 under the combined weight of geopolitical tensions, shifting trade flows, and tightening regulatory demands. Freight markets are being shaped not only by underlying supply-demand fundamentals but also by ongoing distortions from sanctions and rerouted commodity flows.
This week, with diplomatic focus sharpening in Moscow and newly released trade data offering clearer insight into Russia’s export behaviour, Allied Quantumsea Research poses a pivotal question for the market: are we nearing the final phase of the current geopolitical cycle, and how might freight markets adjust as wartime distortions begin to fade?
Moscow at the Center of Diplomatic Attention
Diplomatic activity surrounding the Russia–Ukraine conflict attracted increased attention this week, with reported discussions expected to continue in Moscow. As Washington broadens its diplomatic outreach, market observers are reevaluating how any potential post-war framework, even if tentative, could eventually impact maritime trade. The focus is shifting to timing and the speed at which shipping patterns might adjust if geopolitical pressures start to ease.
Russian Export System Under Mounting Pressure | Coal Identified as the Main Cause of Revenue Drop
Allied Quantumsea Research reviewed the latest CREA data, which show a pronounced weakening in Russia’s fossil fuel export earnings. In October, total revenues fell 4% month-on-month to EUR 524 million per day, the lowest level since the start of the invasion. The bulk of this decline came from coal, where revenues dropped 10% to EUR 62 million daily despite a 14% increase in export volumes. This is the first revenue contraction in six months and highlights Russia’s eroding pricing power even as shipments grow.
Other energy segments delivered a more mixed performance. Crude revenues were broadly stable at EUR 238 million per day, split between EUR 59 million from pipelines and EUR 179 million from seaborne exports.
LNG was the only segment showing clear upside, rising 10% to EUR 38 million daily after a 29% increase in volumes. Pipeline gas revenues slipped 6% to EUR 69 million per day, while seaborne oil products saw an 11% decline to EUR 114 million. None of these shifts, however, matched the severity of the coal downturn, which remains the primary driver of October’s revenue losses. The widening gap between rising volumes and falling revenues underscores intensifying discount pressure and the constraints on Russia’s ability to monetise exports under sanctions.
China & India – Dominant Buyers, Evolving Dynamics
China accounted for 44% (EUR 5.8 bn) of Russia’s fossil fuel revenues in October, driven primarily by EUR 3.7 bn in crude, with coal, gas, and LNG providing additional support. Its seaborne crude imports surged 21% m/m. However, the recent disappearance of Rosneft and Lukoil cargoes indicates an early adjustment to anticipated U.S. Office of Foreign Assets Control (OFAC) sanctions.
India was the second-largest buyer, with EUR 3.1 bn in imports, almost entirely crude-related (EUR 2.5 bn). Its purchases rose 11% m/m as state refiners intensified their intake of Russian barrels. The Vadinar refinery lifted throughput to 90%, pushing Russian crude imports up 32%, but its exports fell 47% y/y, pointing to the possibility that sanctions are beginning to weigh more heavily on downstream product flows.
Price Cap Effects – Urals Still Trades Above the Ceiling
Urals crude averaged USD 59/bbl in October (about 4% lower than the previous month), remaining above the official USD 47.60/bbl price cap. The discount to Brent narrowed to roughly USD 4.92/bbl over the same period. With the discount tightening and U.S. sanctions scrutiny increasing in India, Urals purchases could start to ease as buyers reassess the trade-off between price and compliance risk.
Tanker Participation – The Gradual Return of G7+ Tonnage
G7-aligned tankers continued to regain ground in October, accounting for 38% of Russia’s seaborne crude exports. Shadow-fleet vessels still carried the largest share at 44%, with non-sanctioned non-G7 units contributing the remaining 18%. The pattern was more pronounced in oil products, where G7+ vessels moved 79% of volumes, compared with 15% for sanctioned shadow vessels and 6% for other non-G7 units. In total, 360 tankers participated in Russian export trades during the month, including 117 shadow vessels, 41 of which were more than 20 years old. The reliance on older, lightly insured tonnage continues to pose non-trivial operational and environmental risks. In the event of a coastal incident involving such vessels, cleanup and liability costs could exceed EUR 1 billion, underscoring the exposure faced by littoral states as enforcement regimes become more stringent.
How 2026 Could Evolve Under a Peace Scenario
If a peace agreement between Russia and Ukraine materialises, 2026 has the potential to mark the beginning of a significant rebalancing in global shipping. Crude flows could move toward more conventional regional patterns, supporting utilisation in the Suezmax and Aframax sectors, while reducing the unusual long-haul tonne-day support that has buoyed the VLCC market since 2022. A recovery in Ukrainian grain exports would likely elevate Supramax and Handysize demand, and any easing in US–China agricultural tensions could restore greater predictability to soybean and corn trades. In such a scenario, 2026 emerges not as an extension of crisis conditions but as the first step toward a more stable, structurally consistent freight environment, where trade lanes begin to reflect fundamentals rather than geopolitical disruptions.
Data Source: Allied