Donna Dong
Research Analyst, Flux
July Brent Climbs to $104/bbl
Brent climbs on conflict; BP profit surges; Hormuz LNG resumes; China may export fuel; Nigeria caps jet fuel prices.
The Jul’26 Brent futures contract has climbed from $102.64/bbl at 06:27 BST to $104.43/bbl at 12:00 BST (time of writing).
In the news, British Petroleum (BP) more than doubled its first-quarter profit from the previous year, driven by soaring oil prices and a surge in oil trading during the latter part of the quarter amid the Middle East conflict. The company announced an underlying replacement cost profit – the closest equivalent to net profit – of $3.2 billion, which is over twice the $1.4 billion earned in the same period last year. Elsewhere, the first LNG vessel to pass through the Strait of Hormuz since late February has cleared the chokepoint and is now approaching India’s coast. The tanker, the Mubaraz, operates under a Liberian flag, loaded cargo at the UAE’s Das Island, and has successfully traversed the Strait after idling in the Persian Gulf. In China, Bloomberg has reported that Chinese state refiners may resume fuel exports next month if Beijing approves their applications, citing sufficient domestic stocks. Companies such as Sinopec and CNPC have applied for export permits for diesel and gasoline. Related, China's Hengli Group, whose refinery unit was sanctioned by the US, has restructured the ownership of its Singapore trading arm to place control in the hands of a Chinese local government entity. Hengli Petrochemical International, the Singapore unit, is now 95% owned by Dalian Changxing International Trade, with Hengli Petrochemical (Dalian) Refinery holding the remaining stake. Several trading executives have expressed scepticism that this change would protect the Singapore unit from distrust by its counterparties, given its ownership at the time sanctions were announced last Friday. In other news, Nigeria's government is setting limits on jet fuel prices and permitting airlines to purchase supplies on credit, aiming to prevent flight disruptions caused by rising fuel costs. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) stated that aviation fuel should sell for between 1,760 and 1,988 naira ($1.29 to $1.46) per litre in Lagos, and between 1,809 and 2,037 naira in Abuja, based on benchmarks from April 17 to April 23. The authority also cautioned that prices might still increase due to market volatility amid the Middle Eastern conflict and rising supplier costs. Finally, the Jul/Aug and 6-month (Jul/Jan) Brent futures spreads are at $5.24/bbl and $18.11/bbl, respectively.
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