
Dubai Market Report – Back to the Status Quo
The Dubai market has largely returned to normality as geopolitical risk unwinds. As per usual, the Strait of Hormuz didn’t close this time, although there was noticeably more market anxiety. The forward curve is being heavily pressured, with Brent/Dubai boxes aggressively selling off. On the first day of July pricing, the Jul’25 Brent/Dubai fell below -$1/bbl, while the Jul/Aug’25 box came off to -$0.95/bbl, which marks an extreme contango structure. Aug’25 is following suit and was the next contract to fall below flat. Another notable drop was Q4’25/Q1’26, which fell from $0.05 to -$0.15/bbl. The market has largely disregarded the prospect of OPEC+ supply hikes, interpreting it as existing overproduction being formalised. The combination of the market buying Cal26 and selling front boxes would have put participants comfortably in the money. Here, trade houses and majors were the main players. Previously, we noted that refinery sell side hedging flows in Cal26 had distorted Brent/Dubai. Now that these flows have subsided, this distortion has left a vacuum conducive to a mean reversion. There is greater conviction in the downside for Brent/Dubai boxes as these flows are more speculative, whereas refinery flows are more price-agnostic.