Brent Breaks Above $90/bbl as Kuwaiti Ship Attacked

In the news, a Kuwait-owned oil products tanker has been struck by an unknown projectile in the Strait of Hormuz near Oman, marking a further escalation in tensions around the region's key shipping lanes. According to Bloomberg, citing security consultancy EOS Risk Group, the vessel involved was the Kaifan, owned by Kuwait Oil Tanker Co. The UK Maritime Trade Operations (UKMTO) said it received reports that the tanker had been hit around 8 nautical miles northeast of Limah, Oman; the crew has since abandoned the vessel and been evacuated by lifeboat. In India, crude imports from Russia and Latin America rose sharply in the April-June quarter, while imports from the Middle East fell as disruptions to the Strait of Hormuz restricted Gulf supplies. After initially reducing Russian purchases to avoid higher US tariffs, India has increased imports following a temporary US waiver to offset lost Middle Eastern volumes. Imports from the Middle East fell 27% q/q to 1.55mb/d, while imports from the Commonwealth of Independent States, including Russia, rose 8.3% to 2.26mb/d. In June alone, Russian crude imports jumped 37.4% m/m to a record 2.64mb/d, accounting for around half of India's total crude imports. In other news, Russia is redirecting fuel supplies from Siberia and increasing imports from Belarus to prevent shortages in the Moscow region, as Ukrainian drone strikes continue to disrupt refinery operations, according to Reuters sources. Fuel supply has been under pressure across Russia since attacks intensified in May, with gasoline output falling to around 65% of typical seasonal demand in early July. A mid-June strike on the Moscow refinery triggered shortages and long queues at filling stations, though supplies in the capital have since largely stabilised. Finally, as of the time of writing, the front-month (Sep/Oct) and 6-month (Sep/Mar’27) Brent futures spreads are at $2.78/bbl and $11.13/bbl, respectively.

This afternoon in Brent/Dubai we continued to move down, with the Aug Brent/Dubai moving down from $5/bbl to $4.56/bbl. There was selling of Aug Dated/Dubai, consistent selling of Brent/Dubai by fund and bank. There was some buying of Oct Brent futures vs Sep Dubai cross month by refiner and US major. The Dubai spreads continued to move up, less OTC interest but no seller in the market. There was a lot of trade buying of Sep/Oct Dubai spread. The Aug/Sep traded $1.70/bbl to $2/bbl. The boxes all moved lower with the strong Dubai spreads, the Sep/Oct box the most offered, trading down from $0.70/bbl to $0.45/bbl. The quarterly Brent/Dubai were all offered by bank, producer, and tradehouse, with crack hedging flow. The Q4 traded down from $3.40/bbl to $3.13/bbl.

VLSFO continued to power up into the afternoon. Sing spread buying was fairly aggressive on higher crude, Aug/Sep traded up to $47.00/mt. The crack followed suit, with buying intensifying into the Euro window buying up to $22.70/bbl by end of the day. Euro spreads were initially well bid, however some selling came in around $28.50/mt levels where it closed the afternoon. The Euro crack was stronger as a result trading up to $8.80/bbl.

In HSFO, Chinese arbers were initially sellers on 380 cracks which saw the Aug 380 crack trading down to -$2.50/bbl. However once that got taken out, 380 E/W buying came into the market which saw the 380 crack end the afternoon at -$1.50/bbl. As mentioned the E/W saw some buying up to $44.50/mt. The barge crack was weaker due to E/W strength which resulted in the barge crack down to -$8.35/bbl from -$7.80/bbl. Barge spreads were down a touch as well, with Aug/Sep down to $9.25/mt from $10.00/mt.

This afternoon in distillates, Sing gasoil was better bid from Sep/Oct onwards. E/W was scale back offered in the front, rising $7 to -$44/mt. Q4 has been better bid, with bids stepping up from -$60/mt to -$54.50/mt over the afternoon. Regrade was more sellside, dropping to -$2/bbl in Aug, while kero spreads were thin and a touch more sellside in Aug/Sep. Prompt ICE gasoil was weak, dropping from highs of $55/mt to $46.50/mt. Aug crack saw similar flow, dropping $2 from morning highs back down to $68/bbl. European jet diffs smalls up, trading slightly higher than yesterday at $99/bbl in Aug.

It was another choppy afternoon in gasoline. RBBRs sold off post-US open before recovering slightly during the window, as arbs were offered down from 27.80c/gal to 27.05c/gal. EBOB cracks got sold down to lows of $35.20/bbl before trading back up to $36/bbl end window on higher RBBRs, and Q4 got bid up to $17.20/bbl. Spreads were mixed, as Aug/Sep remained rangebound around $71/mt. E/W continued to move up, trading at -$11.20/bbl in Aug where it found some sellside interest, and Aug 92 cracks were valued at $24.65/bbl.

This afternoon in naphtha, E/W prices higher with real interest sell side, trading up to $60/mt in Aug E/W. Aug/Sep sees aggressive buying pre-window, seeing Aug/Sep MOPJ gapping up from $52/mt to $61/mt, with Aug/Sep Europe chasing higher also, with Aug/Sep E/W box trading up to $11.50/mt this afternoon. Aug cracks gap up on the back of the aggressive Aug/Sep buying, seeing Aug naphtha crack chase up from -$1.10/bbl to -$0.60/bbl pre window, seeing the upward momentum slowing during the window. Sell-side interest in Dec crack from small trade at -$6.45/bbl.

This afternoon in NGLs, FEI spreads had interest in both the prompt and deferred, with Aug/Sep trading up to $45/mt, and Q1/2'27 getting sold at $57/mt. Dec/Dec FEI also had selling at the $88/mt level throughout the afternoon. Aug LST/FEI found some support at -$344/mt and traded around that level across the afternoon, whilst the Sep arb was getting hit at -$294/mt, down from last night’s close of -$281/mt. In the deferred, Q4 LST/FEI was trading at -$250/mt. LST spreads had good buying in the deferred, with Q1/2'27 trading at 5.625c/gal, and Q4'26/ Q1'27 getting lifted at 0.125c/gal. Nov/Dec LST was also getting lifted at -0.75c/gal, where it settled post window. In butane, Aug/Sep C4 ENT was hit at flat, and Q4'26/ Q4'27 was trading at 17.5c/gal. C4/C3 LST interest in Aug and Cal'27, trading at 29.625c/gal and 17.75/gal, respectively.