Brent Climbs Above $80 as Ukraine Strikes Russian Refining Assets

In the news, Ukraine launched a major drone attack on Russia, with President Zelenskiy claiming strikes on the Slavneft-Yanos refinery in Yaroslavl and the Bashneft-Novoil refinery in Bashkortostan. Russian officials said 93 drones were intercepted over Yaroslavl, but falling debris ignited a fire at the Slavneft-Yanos refinery, injuring four people. The attack marks Ukraine's latest effort to disrupt Russian refining capacity, targeting a facility capable of processing around 300 kb/d. Elsewhere, Nigeria's upstream regulator expects at least 22 offshore oil and gas projects to begin production by 2030, backed by up to $50 Bn of investment. The country has approved over $57 Bn in field development plans since 2024 and awarded 37 exploration blocks to 31 companies in its 2025 licensing round, with further acreage planned for 2026. These initiatives, alongside regulatory reforms, infrastructure improvements and enhanced security, are intended to boost investor confidence and help Nigeria nearly double crude oil production to 3 mb/d by 2030. In other news, Sinopec has significantly increased purchases of Russian ESPO crude as Middle East supply disruptions from the Iran war reduce availability. The world’s largest refiner bought around 240 kb/d – 320 kb/dof ESPO for July-September deliveries, benefiting from discounted prices and lower freight costs. Sinopec has reduced Saudi crude purchases, replacing Middle Eastern barrels with Russian supplies to maintain refinery operations and export margins. The shift highlights China’s focus on cheaper, reliable crude sources amid geopolitical disruptions, despite previous pauses in Russian oil buying following US sanctions on major Russian producers. Finally, at the time of writing, the front Oct/Nov’26 spread is at $1.57/bbl and the six-month Oct/Apr’27 spread is at $5.61/bbl.

Quiet morning in dated. Saw some buy side interest in the front of the curve again with continued buy side interest in bal Aug'26 24-28 Aug'26 and buying of $17.00/bbl-21 Aug'26 2w up to $2.23/bbl as well as some BALMO Aug'26 DFL buying. However we did see selling of Cal Aug/Sep'26 DTD from Sing. We also saw buy side interest in some Sep'26 rolls with interest in 3-7 Cal Sep'26 and $7.00/bbl-11 Cal Sep'26, however did see sell side interest of Cal Sep'26 21-25 Sep'26. Further down the curve saw some selling Q1'27 DFL.

VLSFO saw lower volumes traded this morning, Sing spreads saw some buyside interest with Sep/Oct'26 and Oct/Nov'26 trading up to $36.50/mt and $19.25/mt. Conversely, Sing cracks saw sell side interest, Sep'26 Sing crack traded slightly lower down to $19.65/bbl due to pressure from the Nov'26 Sing crack trading down to $13.10/bbl. Euro cracks came in better bid early this morning trading up to $8.50/bbl on screen, However cracks were then implied lower due to Oct'26 0.5 E/W buying, closing around $8.30/bbl. Lower. Spreads were largely unspoken this morning with Sep/Oct'26 trading around $25.00/mt similar levels to last night.

In HSFO, 380 came in better bid again this morning before the entire complex sold off, Sep/Oct'26 380 briefly touched $28.00/mt early this morning before quickly retracing back down to $27.00/mt and then selling all the way down to $25.75/mt. Sep'26 380 crack sold down from -$1.65/bbl to -$1.90/bbl, while the E/W sold down from $45.00/mt to $42.50/mt. Barges were better bid this morning with the Sep'26 crack trading up to -$8.75/bbl, Spreads traded up from last nights close, with Sep/Oct'26 trading up from $10.75/mt to $11.25/mt.

This morning in distillates, Sing gasoil spreads were well offered in the front, with Sep/Oct'26 from $5.55/bbl down to $4.90/bbl trading post window. Front E/W traded higher to -$67.00/mt before selling down to -$71.50/mt last. Regrade saw selling on the bal spread, while Sep'26 regrade traded up to -$0.40/bbl.

Prompt ICE gasoil spreads traded range-bound, with Sep/Dec'26 between $128.00/mt and $135.00/mt, while the Oct'26 crack traded around $61.50/bbl. Heating oil spreads weakened, while HOGOs were range-bound, the Sep'26 HOGO swap at 27.70c/gal.

This morning in gasoline 92 MOC was bid. The East opened strong with cracks trading at $16.60/bbl in Sep'26 but refiners and trade houses had good size to sell in Sep'26 and Oct'26, pushing cracks down to $16.20/bbl. Spreads also opened better bid, with Sep/Oct'26 trading up to highs to $3.60/bbl before softening post window. E/W was better offered, trading down from -$10.20/bbl to -$10.75/bbl with Q4'26 valued at -$2.85/bbl. EBOB cracks opened higher at $27.10/bbl and remained stable around that level. Spreads were better bid to start as well, with Sep/Oct'26 bid at $74.00/mt and Oct/Nov'26 at $42.25/mt. Arbs had good buying in Sep'26 around 11.00c/gal.

This morning in naphtha was stronger overall, with some buying in MOPJ flat price and MOC better bid, though the move was not especially aggressive. Sep'26 MOPJ cracks firmed from -$0.25/bbl to -$0.05/bbl, with Nov'26 also better bid from -$2.10/bbl to -$1.82/bbl, while spreads were supported with Sep/Oct'26 around $19.00/mt, Oct/Nov'26 at $18.00/mt and Nov/Dec'26 at $12.00/mt. Naphtha followed suit, with Sep'26 cracks rallying from -$4.85/bbl to -$4.25/bbl and spreads firmer as Sep/Oct'26 traded around $18.50/mt and Oct/Nov'26 around $16.50/mt. E/W was better bid as well, with Sep'26 moving from $37.50/mt to $39.50/mt, helped by the relative flat price strength in the East.

This morning in NGLs, there was some early FEI flat price buying out of May'27 at $512.00/mt. The BALMO Aug/Sep'26 FEI was trading at $32.00/mt, where it held across the morning. Sep/Oct'26 FEI traded range-bound at $21.00/mt and $22.00/mt, eventually settling at the first. Oct/Nov'26 FEI opened trading at $9.50/mt, $1 stronger than yesterday’s closing level. Sep'26 LST/FEI was trading at -$276.00/mt, before weakening to print -$280.00/mt, and the Cal 27 arb was sold at both -$173.00/mt and -$174.00/mt. In CP, there was some Sep/Oct'26 interest, trading at $32.00/mt. End window on screen, Sep'26 FEI flat price was hit at $635.00/mt and $634.00/mt.

Gold extended its biggest rally in six months as progress toward reopening the Strait of Hormuz eased fears of energy-driven inflation. Bullion topped $4,300/oz this morning after jumping 4.2% in the previous session. Iran said it had reached an agreement with Oman on a temporary shipping route through the strait, although officials stressed this would not amount to a full reopening. Oil prices fell, reducing pressure on the Federal Reserve to raise interest rates. Markets now expect only one US rate hike by year-end. Lower rate expectations, a weaker dollar and fund buying supported gold, silver, platinum and palladium.

The US economy is still running hot, as ISM services and manufacturing PMIs printed strongly for July. Manufacturing outperformed, at 55.6, driven by demand for AI, semiconductors, aerospace and defence. Services were strong too, printing 54.1. New orders strengthened and business activity reached a five-month high, although companies were more cautious on hiring as higher costs continued to squeeze margins.

Europe’s July construction PMIs were stronger than June, with the euro area PMI at 44.3, up from 42.8 in June and the strongest since March. However, it has been deeply contractionary for over three years. Germany factory orders were unexpectedly strong, rising 3.1% m/m, thanks largely to strong demand for processing equipment and electronics.

Over in Asia, the KOSPI index dropped 4.58% on Thursday to finish at 6,296, giving back the gains it had made in the prior session. The decline was driven largely by weakness in semiconductor stocks, which came under pressure as technology shares sold off worldwide. Chip heavyweights led the retreat, with Samsung Electronics losing 6.50% and SK Hynix tumbling 10.67%.
The damage extended across other major stocks as well. SK Square slid 13.40%, Samsung Electro-Mechanics fell 9.07%, and SK Inc dropped 9.79%. LS Electric declined 4.48%, LG Electronics eased 2.79%, Hyundai Motor slipped 1.73%, and Doosan Enerbility edged down 1.17%.
On a more positive note, the losses were partly cushioned by news that South Korea posted a record current account surplus of $49.73 billion in June. That figure was underpinned by robust semiconductor exports, which bolstered confidence in the country's trade outlook.

In Japan, despite an estimated $87 billion in coordinated dollar sales by the BoJ and US Treasury on Thursday and Friday, the yen has slipped roughly 1.5% from its Aug. 3 high. The intervention, Japan's largest yet, with Treasury Secretary Bessent vowing to repeat it if needed, briefly pulled the currency to near 155 from 40-year lows around 164. However, it’s drifted back to 157-158. And yet the pressure persists, as US-Japan rate differentials continue to underpin dollar strength.