The Officials

The dip didn’t last long. Trump’s pessimism on Iran and optimism on China had Brent bounding up to the $68 level again, breaking above there for the first time since 23 April! 55% tariffs on Chinese imports into the US and 10% tariffs on China’s imports of US goods. Americans should feel so grateful that now they get to pay 55% more for the Chinese products they import while the Chinese people equally should feel grateful they only pay ten percent more for what they import from America! Let me ask y’all who got the better deal when you buy your next TV? While Brent reacted, other markets quietly sat on their hands, digesting the announcement: equities ebbed and flowed and the DXY only wilted marginally. The first of many? Lutnick assured us of “deal after deal” next week – but he’s not one to under-promise, having said the same many times before… Lunatic times!

It’s more important than ever to be fluent in reading tea leaves and consulting the stars or coffee grounds to understand where the market’s going. With so much up in the air at the minute, the market is unsure which way to go: trading off scraps of clues coming out of the US-China trade talks is tricky game, while Iran and the US contradict themselves in their public and private statements. A “framework” for US-China trade is a good start, but it’s nothing for the market to work with. In whatever analysis, you or we are making, take into consideration TACO as well as a growing reluctance for any self-respecting country to just give
in. This means that the global growth rate will be lower than expected with energy crimped slightly. A trading source expected the adjusted growth rate pre import/exports accounting to go negative, job losses to mount and industrial activity to decline.

The window’s been chaotic of late and today continued to be busy, though somewhat more orderly. BP led the charge on the sellside, lowering offers for both Midland and CIF Forties. It was the Midland that attracted buying interest, as Totsa swept in to lift the offer for 22-26 June at Dated +$1.25, while PetroIneos picked up Vitol’s offer at $1.95 over Dated for 3-7 July – that’s a steep curve!

In the week ending 6 June 2025, exchange traded futures volumes in Brent, Gasoil, Heating Oil, RBOB and WTI increased across the board w/w. With all instruments seeing steep rises in volumes, especially in September and October, with most
notable ones, Heating Oil (over 81% and 96% respectively). For Brent, it was the September contract volumes that had the largest increase (over 39%), whereas in WTI, the August futures soared the most (over 60%).

It’s allocation day! And no huge surprises in the July allocations; the Saudis held pretty steady from their June provision to send 47 mil bbl to Chinese refiners in July. Within that, there was some chopping and changing as Unipec and PetroChina got slightly larger allotments, while Rongsheng lost 1 mil bbl – but the ‘teapot’ (bigger than most global refineries) by far the largest share! Allocations for May hit a record since the start of The Officials at 48 mil bbl – the highest since July 2024 allocations – while the June and July allocations occupy second and third spots, respectively.

Flat price keeps going! $67 was a tempting target as Brent climbed this morning, stretching out its fingers to reach that elusive level. It brushed $67 at 13:45 BST and another during the window, but failed to gain a toehold and came to the European close at $66.92/bbl. We’ve been bullish for a few weeks now and the market’s finally waking up to the fact OPEC quota hikes don’t equate to supply increases.

Some OSPs bring joy, others bring pain. Joy for consumers ready to gobble up cheap crude, against pain of producers squeezed by low prices. The Murban/Dubai debacle had ADNOC up in arms, frustrated its ‘most valuable’ grade was setting the benchmark, pricing below the heavier, sourer Upper Zakum. For July, Murban is set at $63.62/bbl, down over 4 bucks from June pricing, with Upper Zakum set at a 10c premium, Das at Murban -55c and Umm Lulu at Murban +15c. The 10c UZ/Murban inversion is minor stuff compared to the downward flat price correction. This is real money! Imagine you produce 4 mil b/d and export 3 mil b/d, (this is just illustrative) but this would mean $12 million less revenue per day or $360 mil less per month. We’ll be talking billions if the market doesn’t recover and persistent overproduction continues. You cannot overproduce and have no price impact. In other words: you can’t have your cake and eat it!

On the 81st anniversary of D-Day, the North Sea was sombrely quiet and there was not a great battle among the traders. But the longs were definitely winning in the flat price front. Brent hit triple six for a while, $66.6+ something. The window players look fatigued after a busy week; Totsa and Mercuria were back, bidding for Midland yet again, bringing bids of +$1.45 and +$1.65 over dated. The sellside was also populated by the usual suspects, as BP and Phillips offered again, bringing +$2.00 and +$2.10 over dated to the table. But neither side wanted to budge much further, and no one traded.

Rome is burning! Brutus, Cassius, Judas… they’re all out for revenge. The knives are out and everything’s fair game! Reality TV soap operas can’t come close to this level of drama. We wouldn’t blame the US’ global rivals for warming their feet by the fire with a massive bucket of popcorn watching this one go down. The political schism is of monumental scale and could rip the American political scene asunder! As chaos engulfs the US political scene, oil remains largely unchanged, with August Brent still firmly anchored to $65, on a steady downtrend through today’s Asian session.

Trump’s phones are busier than a teenager’s as he calls his bros one after the other. Or are they rivals, despair not, a deal is in work or not. He first called Putin about the Russia/Ukraine war and today Xi to talk about the US-China trade war. Bessent said trade talks had stalled and stagnated and suggested the two biggest wigs should talk directly to iron things out. The call gave the market some good vibes and Brent flat price jumped to near $65.80 in the aftermath – it wasn’t just oil, either, as equity futures jumped on the news (though quickly sold off) and gold dropped some of its gains made in early trading.

Brent was on a sideways run though today’s Asian session, before climbing again to above $65, though it slipped to the close at $64.93/bbl. The futures structure is creaking under the pressure of headline extra supply and lukewarm demand prospects. The reality is far more complex but few understand that any headline about OPEC supply increase is fake. We mentioned yesterday that the Dec/Jan spread had returned to backwardation but it keeps flitting back and forth with contango, while the front spread is being ground down towards 60c, having started the month near 80c.

The Saudis know how to build the tension! They had us waiting a while into the afternoon for the July OSPs. A 20c cut on the month for Arab Light to Asia – the same for Extra Light, while Medium got a 10c cut and Heavy held steady from the June OSPs. Hey, Arab Heavy is the good stuff they need for the summer burn, so no need to discount it! The cuts to Asian OSPs were slightly less than the month on month change on the Dubai backwardation structure implied, and perhaps the Saudis also considered the shenanigans in the Dubai market and the impact from the weak Murban during May trading. The Saudis also took some of the cash that they so generously gave in previous months; we noticed they had frequently set OSPs slightly below where structures had implied in recent months.

Middle Eastern Official selling prices (OSPs) are to be issued later in the day and ahead of the region’s religious holidays. We wish everyone celebrating a restful period from Asia through the Middle East to Europe and the Americas. Keep an eye on the X/Twitter account (@OnyxOfficials), where we will release the OSPs as soon as we get them. A quick survey of market participants by The Officials showed market opinion is divided: most agree on some degree of cut (referring to Arab Light to Asia), but the degree is split between a few cents to as much as -40c from the June price. The change in Dubai structure implies a cut around 35-40c…

$65 is sticky! Brent flat price – even after the July contract’s expiry – can’t get away from it! It spent today fluctuating either side of that mark, stuck in a tight range as the market appears to wait patiently to wake it from its slumber. Even Don Taco just has traders guessing which way to go…

In the week ending 30 May 2025, exchange traded futures volumes in Brent, Gasoil, Heating Oil, RBOB and WTI front month contracts declined w/w -with Brent futures falling over 61% heading into expiry on Friday. Brent and RBOB future volumes rose in the August tenor w/w; in September Brent future volumes moderately dropped w/w; whereas RBOB volumes soared almost 36% compared to the week before. By contrast, volumes in Gasoil, Heating Oil and WTI futures decreased across the board.

Today marks the anniversary of the first Issue of The Officials. Since 3 June 2024, we have published 543 Issues: Asia edition (250), European edition (252), Liquidity Report (16) and Editorial/Special Reports (25). The publication of physical assessment such as Dubai, Dated Brent and key market indicators such the Officials Brent Index (OBI) have generated great interest among our readers and exchanges. The publication of swap valuations has also proven helpful to our community. Our readers need easily accessible low-cost markings. We have now completed a full year of Dubai, Brent and derivatives assessments as well as newer benchmarks for Bitcoin, gold, currency indices and Dated Brent assessments.

The first Dubai window of June may have been silent, but the North Sea was anything but! Totsa stormed in early on to bid for a whole range of mid- to late-June Midland cargoes. Mercuria came in bidding for Midland too, while BP, Shell and Repsol all offered. An eruption of interest! Like Etna in Sicily. Totsa got lucky, as Repsol sold it a 16-20 June cargo at Dated +$1.60, while BP and Vitol each hit one 26-30 June Midland to Totsa at $1.90 over Dated! Just one more with those dates will net Totsa a VLCC… After such a busy first June window, the physical differential zoomed up to 61c!

A new dawn, a new month, a new window? Maybe but nobody can decide just yet. Not a single trade in June’s first Dubai window, as the players got all cagey and didn’t want to take the bull by the horns. The Taureau was back but looked rather solitary as a bidder, not raising too aggressively and lacking support on the buyside. PetroChina had been the primary buyer in May but today decided to try its hand at both bidding and offering, though it seemed more committed to the sellside and withdrew its bid well before the close. The sellers were more numerous – Unipec, Reliance, Hengli and BP among them – and, without anybody seizing responsibility on the buyside, the physical premium (now reflecting June/August) fell to $1.31. But on an implied basis the premium closed the month in May at 77c.

It has been a good year of publishing for The Officials. And what a year it has been: 2+ million reads, a deal with Jakarta Futures Exchange signed, a new Liquidity Report, a full year of Dubai assessments and four months of Dated Brent. And before we forget, our presence in Dubai continues to grow. Oh, the juicy bits we hear here. A great place and very welcoming! We’ve reached the end of our 12th month of publication. We have a lot of data and if you need to contrast and compare, just call or email us. We are here to help you!

It has been a good year of publishing for The Officials. And what a year it has been: 2+ million reads, a deal with Jakarta Futures Exchange signed, a new Liquidity Report, a full year of Dubai assessments and four months of Dated Brent. And before we forget, our presence in Dubai continues to grow. Oh, the juicy bits we hear here. A great place and very welcoming! We’ve reached the end of our 12th month of publication. We have a lot of data and if you need to contrast and compare, just call or email us. We are here to help you!

After making the most of the good vibes early this morning on the news reciprocal tariffs could be toned down, Brent took a tumble before lunchtime, plummeting back towards $65. That wasn’t all though and it dropped below $64 by 15:00 BST. The front spread started getting funky though, as we approach tomorrow’s expiry, while the M2/M3 spread held relatively steady in the low 60c range.

The wheels are falling off! A US federal court struck down Trump’s cherished reciprocal tariffs, deeming them an overstep of presidential authority and unconstitutional. There is a 10-day deadline, but, of course, the White House was quick to shout back
that it’s “Not for unelected judges to decide how to properly address a national emergency”. But really, this ruling is an effort to offset the economic emergency of a financial meltdown precipitated by Trump’s gung-ho approach to tariffs! This is a point of pride and ego now!

Brent tirelessly worked its way up from the late afternoon to $65.04/bbl by the close, gaining $1.38/bbl from yesterday’s close. Is it the summer burn? Throughout flat price’s upward slog, however, the front spread held fairly steady, hovering near 55c and reaching the close at 57c. But after the close Brent rapidly spiked 60c – the bulls are back! Or perhaps not; since 9 May, Brent has struggled to maintain a position above $66 or below $64 for long and has been stuck bouncing between the two for the most part, despite the incessant deluge of headlines – it shows just how much headline fatigue has infiltrated the market.

Don’t believe what the West says, China is not alone and has many friends! The Dubai window showed PetroChina isn’t
entirely isolated on the buyside, as Phillips showed up to lift a few partials from the likes of BP and Totsa. And that makes the
Gang of Four. But, as ever, it was PC doing the lion’s share of the work, bidding with as much vigour as ever! Vitol was back as the
main seller, though joined by Totsa and BP, while Reliance and Gunvor skirted around the edges of the sellside and buyside,
respectively. The more active buyside today saw the physical premium continued its upward momentum to hit $1.49 today – its
highest since 9 May. In the end, Vitol nominated an Oman cargo to PC, the third of the grade this month. Clearly the Murban
stores at Vitol have dried up, as they’ve only nominated one of those since 16 May.

To sanction or not to sanction? That is the question for Trump, who is reportedly considering whacking Russia with more sanctions as Putin gets increasingly on his nerves. But the small price jump that inspired didn’t last long and it fell back very quickly to below $64. Maybe the market’s not entirely sold on another outsized 411 kb/d increase in OPEC production from July, as reports emerged that delegates were expecting exactly that from this week’s meeting.

In the week ending 23 May 2025, exchange traded futures volumes in Brent, Gasoil, Heating Oil, RBOB and WTI front
month contracts declined w/w -Heating Oil especially dropped over 40%. Brent future volumes were up in the August
tenor while WTI dropped w/w, whereas, both September Brent and WTI were relatively flat. By contrast, volumes in Gasoil,
Heating Oil and RBOB significantly decreased w/w across the board.

Brent is still stuck in the mud near $65, eagerly awaiting news from the upcoming OPEC meeting and the dragging US-Iran talks.
Before we get a bombshell from either side, however, the futures structure remains solid at the front, as the front spread holds
firm at 61c, and the M2/M3 spread isn’t far off. Look further down the curve for the fun times, though, as the structure slips into contango from the November contract onwards.

Brent bounced its way through the Asian session through thin holiday liquidity, flirting with the $65 handle but largely failed to break convincingly higher. Despite Trumps optimism on “very good” US-Iran talks, we are still awaiting any sort of break through. On Friday Iran reiterated that they would not concede on uranium enrichment for domestic use, but nevertheless, Trump said to upon his return “I don’t know if I’ll be telling you anything good or bad over the next two days, but I have a feeling I might be telling you something good.” Oh and Trump’s decided to postpone the threatened 50% EU tariffs until 9th July. For now at least, the market is in wait and see mode. Who can blame traders for not reading too much into the Trump-talk, they’ve been burned in the past for that. Crude remains somewhat supported, at least if you look at Brent flat price, which closed at $65.08/bbl up $1.15 on the day. And Brent structures too, with front spreads still robustly backwardated at 63c.

Trump and Bessent launched a classic good cop bad cop offensive on the market after the US woke up, sending flat price on a roller coaster through the European session. After news that a complete end to uranium enrichment in Iran was not on the cards, brent strengthened steadily throughout the afternoon to $64.60/bbl. But then, Trump being Trump, decided it was the perfect moment to take another swing at the EU. He’s now threatening a “straight 50% tariff” starting June 1. His reasoning? The usual: claims that the EU takes advantage of the US, that trade deficits are a form of exploitation… It’s nonsense, really. If anything, it’s the reverse. Trade deficits just mean you’re importing things you don’t have a comparative advantage in – often at better quality
and lower prices.

What’s happening with Murban and Dubai? Will there be a negative QP? Will the price of Dubai be higher than Dubai? Will the Middle Eastern OSPs be affected? So many questions so little time as some market participants expected a new pricing system to be unveiled during the MPGC conference in Bahrain. Meanwhile, Brent was a bit soft around $64.00/bbl plus or minus. The price was edging up over $65 early this week but OPEC quickly nipped that in the bud. But in any case, it’s been searching for a direction, having traded within a narrow mid-$60s range since 9 May, in the absence of any recent tariff news or overwhelming directional impetus. The market seems able to absorb these OPEC paper production hikes -we have explained the production increase is not real yet- without too much trouble, as these announcements and rumours only spark short-term reactions…

Consumption is rising steadily in the northern hemisphere due to summer seasonal demand and burn crude and fuel consumption for power generation in the Middle East. But prices get beaten down on a regular basis by either Trump saying or doing something and by OPEC also talking the market down. Sources wondered why markets weren’t at fifty dollars a barrel already. Bloodied and bruised by the reports OPEC would unleash yet another flood of supply in July, Brent futures tumbled to below $64 and struggled to climb back above that level throughout the day. The front spread also struggled to shrug off the 50c level, despite brief forays up to 56c and down to 46c – eventually coming to the European close at exactly 50c.

Just as Brent was gearing up for a relaxed day, gently oscillating through the Asian session on a gradual uptrend, OPEC barged in and kicked the legs out from under it! Reports OPEC will pursue its more aggressive unwind of production cuts tanked Brent from the $65 handle it had worked so hard to reach and it fell to under $64 within an hour. The prompt spread showed relative resilience, however, dropping from 54c to 47c. By the close, flat price had regathered to $64.37/bbl, though the subsequent decline towards $63.50 suggests the battle isn’t over yet!

The window proceedings opened as you would expect this week: Exxon returned to offer Forties and Midland, while Glencore came back to bid Midland and BP made another appearance bidding Johan Sverdrup. BP wasn’t too fussy about freight either, bidding for both CIF and FOB cargoes. Totsa’s bids for Sverdrup also went unanswered. In fact, the only trade today came as Glencore lifted Exxon’s 2-6 June Forties offer at Dated +$0.65. Remember, this one was a CIF, so the physical differential slipped from yesterday’s strength back down to near flat at just 3c.

Back above $66! But not for long. The market is fatigued. Headlines just don’t do it for the market anymore. Increasingly noisy suggestions Israel is gearing up to strike Iran’s nuclear facilities reminds us of the sabre-rattling last October, but this time the market is much less bothered – at least until something real happens! Brent flat price jumped $1 at the Asian open but the prompt futures simply ignored the development and continued business as usual. By the close, Brent had slid back to $66.20/bbl Trump’s decision to skip over Israel on his Middle East trip is rather telling. As we well know, he wants low oil prices and Israel can only send them skyward – namely by attacking Iran! Hey, no need for a nuclear deal if Iran’s nuclear facilities have gone up in smoke! But Trump’s even trying to one-up his Israeli allies by going full Reagan and attempting to reignite the ‘Star Wars’ project that he’s renamed to the ‘Golden Dome’ of air defences around the US.

There’s trouble in paradise! OPEC’s Secretary General went for the jugular of the IEA, writing a rebuke to what he sees as the Agency’s repeated under-counting of ‘missing barrels’. He’s especially unhappy with the “narrative that the IEA itself has propagated” that new investments in oil supply are not necessary, which jeopardises energy security. The big wigs are pulling their hair out and nitpicking about missing barrels but really they’re both missing the point: nobody knows! Both have their flaws, as it’s the IEA’s foolhardy and premature abandonment of hydrocarbons as a key energy investment versus OPEC’s inability to keep a handle on its members’ output… Physicians, heal thyselves… still! Yet again, Kazakhstan’s production is reportedly on the rise.