FLUX INSIGHTS REVIEW
In September, as the conflict between Russia and Ukraine has been raging for three and a half years, a resolution continues to elude. There continues to be no strong voice for peace, although US President Trump’s position on the conflict has completely reversed at the end of the month, which was shocking but remains met with scepticism. Assessing the extent of damage to Russia’s refineries is challenging, as officials are unlikely to disclose details, and available footage doesn’t clearly show which units were affected. The ongoing wave of attacks has significantly impacted the gasoil market, with roughly 800 kb/d of loadings now at risk as terminals come under fire. In response to domestic supply issues, Russia has imposed a partial diesel export ban through the end of the year, boosting bullish sentiment. However, since the restriction mainly targets resellers rather than producers, the actual export impact is expected to be limited to around 40 kb/d. This has also increased pressure on US exports, and the middle distillate market has been reactive to the EIA stats each week. The Oct’25 ICE gasoil crack rose above $28.00/bbl on 26 Sep in response to the ban. This has softened to $24.30/bbl at the time of writing on 06 Oct, as the market digested the news and EIA stats for the week to 26 Sep showed a quite strong export value of 1.38kb/d, and buying in the gasoil E/W from physical players suggests movement of product to Europe. Levels are quite strong, overall, with the rolling M1 crack almost $5.00/bbl above their pre-war value for this time of year and technical indicators pointing to increasing bearish momentum.
