Brent Briefly Breaks $72/bbl; Meanwhile, Kuwait’s Crude Production Rises

In the news, Kuwait's crude production has risen sharply to 1.65mb/d in June, up from 580kb/d in May, as the country ramped up exports following the US-Iran peace agreement. The increase suggests that Gulf oil flows through the Strait of Hormuz are recovering, with stranded cargoes gradually clearing and regional producers restoring output. Kuwait had been producing around 2.5mb/d before the Strait was effectively closed, with daily output reportedly reaching as high as 1.9mb/d during the final 10 days of June. In the US, Americans are expected to hit the roads in large numbers for the Fourth of July holiday despite gasoline prices remaining well above historical averages. While easing US-Iran tensions has helped reduce fears of supply disruptions through the Strait of Hormuz and brought some relief at petrol stations, drivers are still set to face the second-highest Independence Day fuel prices on record. According to GasBuddy, the national average gasoline price stood at $3.79/gal on Thursday, up from $0.63/gal a year ago. Elsewhere, Chinese independent refiners have stepped up purchases of discounted, non-sanctioned Middle Eastern crude as traders look to clear a surge in Gulf supply following the US-Iran ceasefire. With exports through the Strait of Hormuz recovering and regional producers ramping up output, increased availability has weighed on global oil prices and pushed Russian and Iranian crude into deeper discounts. According to trade sources, ADNOC sold two 2mb cargoes of Upper Zakum crude to Dongming Petrochemical and Shenghong Petrochemical via tender at discounts of $7-9/bbl to Dubai FOB Fujairah quotes. In other news, Kazakhstan’s oil and gas condensate production rose 2% m/m in June to 2.16mb/d, up from 2.12mb/d in May, according to Reuters sources. Crude output, excluding condensate, increased 1.7% to 1.92mb/d from 1.88mb/d. Production at the giant Tengiz field has increased by 3.7% over the same period to roughly 961kb/d. Finally, at the time of writing, the front-month (Sep/Oct) and 6-month (Sep/Mar’27) Brent futures spreads are at -$0.19/bbl and $0.31/bbl, respectively.

This afternoon in Brent/Dubai we traded rangebound. There was more selling by fund and Chinese players, as we traded between $4.80/bbl to $5.20/bbl. The Dubai spreads continued to move higher, up from -$1.30/bbl to -$1.15/bbl at the highs, finishing the day at -$1.20/bbl. There was some more buying of Aug/Nov and Sep/Nov box by tradehouse, at $2.10/bbl and $1.07/bbl. There was some small products selling of Q4 26 Brent/Dubai, trading between $3/bbl to $3.10/bbl.

Lacklustre afternoon in VLSFO. Cracks continued their bounce from the morning lows, particularly Aug Euro 0.5 cracks, which reached $4.65/bbl. Spreads failed to rally, however, due to pressure from Q4'26 0.5 E/W and Q4'26 Euro crack buying up to $43.75/mt and $1.50/mt, respectively.

In HSFO, barges bottomed out and we saw cracks rally up to -$9.30/bbl in the front. 380 spreads continued to see buyside interest but did not break new levels. Initially, 380 cracks saw selling down to -$6.50/bbl before rallying as barges recovered and Chinese arbers bought 380 flat price. Prompt E/W was stable around $20/mt all afternoon.

This afternoon in distillates, Sing gasoil spreads saw some selling at higher ICE gasoil levels, with Aug/Dec trading up to $12.65/mt while E/W sold off in the front, Aug hit from -$49.75/mt down to -$52.25/mt. Kero spreads were well offered, with Aug/Sep at $2.20/bbl and Sep/Oct at $2/bbl.

ICE gasoil spreads rallied across the curve, with Sep/Dec trading from $77.50/mt up to $86.50/mt, while cracks rallied to $48.10/bbl in September futures. European jet diffs came under pressure, with Sep trading from $73/mt down to $72/mt, while Q4 traded from $77.50/mt down to $77/mt. Heating oil spreads rallied, while HOGOs weakened, with Aug HOGO moving from 29.3c/gal down to 28.9c/gal.

This afternoon in gasoline, EBOB flat price traded end window at $861.75/mt with MOC better bid. RBBRs were strong, and tradehouses were selling arbs at 30.50c/gal. This pushed up front EBOB cracks from $30.50/bbl to highs of $31.50/bbl, with Q4'26 valued at $13.30/bbl. Spreads also rallied on higher RBBRs, with Aug/Sep firming from $47.50/mt to $50/mt. E/W couldn’t catch a bid as it fell from -$11.65/bbl to -$12.30/bbl with 92 cracks seeing mixed interest at $19.85/bbl.

This afternoon in NWE naphtha, MOC balanced with the prompt crack trading rangebound during the window, seeing -$3.90/bbl get hit whilst -$3.80/bbl got lifted end of window. Prompt E/W trades up to $40.50/mt, with funds buyside at this level. Buyside interest in Sep crack at -$5.20/bbl end of window with sell side interest in Sep flat price at the start of the window. Buying in Q4 E/W at $33.50/mt from a small trade house.

Very quiet afternoon in NGLs with US off on holiday. FEI was particularly volatile post Sing window and was gapping in both directions with very little provocation. Front LST/FEI hit in Aug at -$205/mt, before weakening across the rest of the afternoon to eventually settle at -$210/mt, and there was also Q4 selling at the -$190/mt level, the same level as yesterday’s close. August E/W strengthened across the afternoon, trading up to $87/mt, having been traded at $85/mt earlier in the afternoon. Little bit of FEI spread interest with Oct/Dec trading at $3.50/mt and Sep/Oct at $1/mt.