Brent Eases as Concerns Over Suez Canal Security Reignite

In the news, QatarEnergy has purchased 33 spot LNG cargoes from the US this year for delivery to South Korea, Taiwan, Bangladesh, India and Japan, according to Reuters sources. The volume is a sharp increase from the 4 cargoes bought last year, as Qatar looks to minimise disruption to key customers after declaring force majeure on LNG exports following the closure of the Strait of Hormuz. Elsewhere, a drone strike that damaged two gas tankers in Egyptian waters has raised fresh concerns over the security of the Suez Canal and SUMED pipeline, key export routes for Saudi crude since the Iran war began. While the Strait of Hormuz and Bab el-Mandeb remain under threat from Iran and the Houthis, the Suez Canal has continued to provide a relatively secure alternative for northbound Saudi exports. Although no group has claimed responsibility for the attack near Egypt's Damietta port, the incident has heightened concerns that this critical route could also become vulnerable, potentially putting up to 5mb/d of oil flows at risk. In Russia, the nation has extended its export bans on diesel and gasoline until 31 January 2027, as part of broader efforts to stabilise the domestic fuel market following refinery disruptions caused by Ukrainian drone attacks. The restrictions also cover marine fuel and gas oils, although producers will be exempt from export curbs on diesel, marine fuel and gas oils from 01 Sep. Fuel exports under intergovernmental agreements and humanitarian aid will continue, while the government has also introduced temporary measures until 01 Nov to ensure farmers receive sufficient fuel during the harvest season. Finally, as of the time of writing, the front-month (Oct/Nov) and 6-month (Oct/Apr’27) Brent futures spreads are at $3.12/bbl and $9.57/bbl, respectively.

This afternoon in Brent/Dubai we traded rangebound, there was Chinese selling of Sep Brent/Dubai, trade buying of Aug Brent/Dubai. The Aug Brent/Dubai traded between $7/bbl to $7.50/bbl. There was some trade buying of Aug/Sep box at $0.45/bbl, but overall spreads were better bid. There was some trade buying of Oct/Dec Dubai and Dec/Jan Dubai. The Q1 continued to be better offered by products around $2.90/bbl.

VLSFO relaxed into the afternoon. Euro was the weaker of the two with the Euro crack coming under a fair bit of selling pressure in the window, trading down to $9.25/mt. We also saw the Aug/Sep Euro sell off down to $29.25/mt from highs of $33.50/mt earlier this afternoon. Sing cracks remained fairly rangebound trading around $25.50/bbl for the majority of the afternoon. Spreads sold off on lower crude with Aug/Sep closing the day around $58.50/mt.

In HSFO, 380 spreads continued to trend higher. Aug/Sep 380 traded up to $25.00/mt. E/W drifted off somewhat down to $58.00/mt on some selling in Sep. 380 cracks were a touch weaker off that combined with barges being weak. Closing the afternoon around $1.70/bbl. As mentioned the barge crack continued to weaken trading down to -$10.95/bbl while Aug/Sep barges sold down to $8.25/mt from $9.00/mt.

This afternoon in distillates, Sing gasoil spreads were mixed with ICE gasoil volatile, with Sep/Oct trading from $9.60/bbl down to $9/bbl before coming back to $9.40/bbl last. Front E/W rallied early afternoon to highs of -$69/mt, before trading back down to -$72/mt last. Regrade turned better bid, with Aug getting lifted up to -$3.10/bbl.

Prompt ICE gasoil spreads sold off initially before rallying into the window, with Sep/Dec down to $185/mt before firming to $197/mt last, while cracks traded to lows of $70.80/bbl and are now back at $72.50/bbl in Sep. European jet diffs rallied into Q4, with Aug up to $70/mt while Sep was lifted at $118/mt. Heating oil spreads and HOGOs were rangebound, Aug HOGO swap around 19.2c/gal.

It was quite a weak afternoon on gasoline. RBBRs sold off but there was arb buying in Aug and Sep, which put pressure on front EBOB cracks. Aug cracks sold $37.50/bbl to down to $36.35/bbl and Aug/Sep saw mixed interest as it came off from $71.50/mt to $70/mt. E/W rallied from -$10/bbl to -$9.10/bbl as 92 cracks saw buyside interest in Aug and Q4 at $27.40/bbl and $15.75/bbl, respectively. Spreads were also stronger as Aug/Sep firmed from $7.60/bbl to $7.80/bbl with refiners on the bid.

This afternoon in naphtha, MOC is better offered. Relatively quiet window with Aug Europe crack trading down to lows of -$0.40/bbl end of window, down from these afternoon's high of $0.30/bbl which got lifted on screen. Aug/Sep nap crack roll finds buying at $2.15/bbl but trails lower post window with selling interest on the flat price spread at $44/mt. Some buy-side interest in Q2'27 naphtha crack this afternoon at -$8.30/bbl.

A quiet afternoon in NGLs today, with limited action across the curves. Aug/Sep FEI was trading at $35/mt, before it softened $1 into the close. The Aug/Sep/Oct FEI fly got sold at $9.50/mt, closing the day at $10/mt. LST/FEI interest in the front of the curve, with Aug trading at -$335/mt to -$333/mt, and Sep was lifted at -$196/mt. Aug/Sep LST was trading at -0.625c/gal across the afternoon, and there was also a winter flat price buyer at 73.75c/gal. In butane, Aug/Sep C4 ENT opened the afternoon trading at 0.625c/gal before softening to 0.5c/gal at the close, and Q4'26/Q1'27 was lifted at 6.375c/gal. C4/C3 LST trading in the deferred, seeing Q4'26 at 32.75c/gal and Q1'26 at 25.75c/gal.