Brent Eases As Sinopec Looks Towards Non-Middle Eastern Suppliers

In the news, Sinopec plans to increase crude sourcing from Brazil, Africa and other non-Middle Eastern suppliers to offset supply disruptions caused by the ongoing Middle East conflict. The national refiner will also continue to strengthen ties with “stable” producers such as Saudi Arabia and the UAE, including sourcing Saudi crude via Yanbu and UAE barrels routed to loading points outside the Gulf. Sinopec President Wan Tao said the company currently holds around 20 days of crude stocks and 15 days of refined fuel stocks, although he did not disclose details on its use of government-controlled reserves. In other news, TotalEnergies said it is still profitably moving Iraqi and Qatari crude through the Strait of Hormuz, with producer discounts more than offsetting higher transport costs. CEO Patrick Pouyanne said oil is continuing to move through the Strait, albeit quietly and with limited public visibility, despite ongoing security risks from the US war with Iran. In other news, the IEA is not currently considering a second strategic oil reserve release, according to IEA chief Fatih Birol. Following the 400mb release in March, around 80% of strategic reserves remain, with the agency continuing to closely monitor the market. In the US, Strategic Petroleum Reserve crude stocks has fallen by 3.7mb w/w to 289.7mb last week, their lowest level since November 1982. The drawdowns form part of a US agreement to release 172mb from the reserve. Finally, as of the time of writing, the front-month (Oct/Nov) and 6-month (Oct/Apr’27) Brent futures spreads are at$1.76/bbl and $11.06/bbl, respectively.

This afternoon in Dated we saw strong selling out the front of the curve from Chinese with 24-28 Aug vs Cal Sep'26 sold down to $1.80/bbl and 1-7 Sep vs Cal Sep'26 sold down to $3.10/bbl. In the paper window we saw majors offering 2 Midland cargos, pushing down the implied diff, but no Forties offers today. In the paper window we saw a trade selling 7-11 Sep'26 CFD at $2.70/bbl and 1-4 Sep'26 CFD sold down to $2.75/bbl by another trade. We also saw a buyer of 27-3 Sep'26 vs 1-11 Sep'26 in the window trading at -$0.20/bbl and -$0.25/bbl.

This afternoon we traded range-bound in Brent/Dubai, as we saw refiner buying of Sep'26 Brent/Dubai every time we dipped below $2.00/bbl on the Sep'26 Brent/Dubai. We traded between $2.00/bbl to $2.20/bbl, with no one chasing to the upside but good buying on dips. The Dubai spreads saw more sellside interest down the curve, refiner the only one buying some Sep/Dec'26 Dubai spread, Majors on the offer side. The boxes all moved higher on the day given the more sellside flow in Dubai spreads.

In VLSFO, Chinese players were buying Sing 0.5% flat price this afternoon, particularly in Oct, on the back of this Oct/Nov 380 traded up a dollar to $26.00/mt while Sep/Oct 380 traded around $34.75/mt. Sep Sing cracks also traded higher, getting bid up from $18.65/bbl to $19.10/bbl at window close. There was some real buying on prompt Euro 0.5% spread this afternoon, Sep/Oct traded from $22.75/mt up to $23.50/mt where it is currently valued. Sep Euro cracks were rangebound this afternoon, trading around $6.20/bbl.

In HSFO, Chinese players were very aggressively buying Oct 380 flat price this afternoon, the most aggressive buying we have seen in months. As a result of this Sep 380 crack strengthened from this mornings sell off and was bid up from -$0.95/bbl to -$0.50/bbl. Sep/Oct 380 traded between $36.26/mt and $36.75/mt during the window, it then bounced up to $27.00/mt post window. There was some real selling around $70.00/mt on 380 E/W. The barge complex strengthened this afternoon, due to real selling of the E/W and some real buying on cracks, with the Sep barge crack trading up from -$11.95/bbl to -$11.35/bbl. Sep/Oct 380 was bid up from $10.25/mt to $11.50/mt.

This afternoon in distillates, Sing gasoil spreads sold off on lower ICE gasoil, with Sep/Oct'26  from $4.85/bbl down to $4.25/bbl hit. Front E/W sold off to lows of -$94.00/mt before finding support and rebounding back to -$81.25/mt. Kero spreads saw aggressive selling, with Sep/Oct'26 hit down from $1.45/bbl to $1.05/bbl, while Oct'26 regrade sold down to -$1.60/bbl.

Prompt ICE gasoil spreads sold off aggressively, with Sep/Dec'26 trading from $137.50/mt down to $124.25/mt, while Oct'26 futures cracks weakened $3.50 to $70.70/bbl last. European jet diffs sold off in the front, with Sep'26 down to $39.50/mt while Q4'26 traded down to $90.00/mt. Both heating oil spreads and HOGOs weakened, with the Sep'26 HOGO swap trading from 27.60c/gal down to 26.60c/gal last.

This afternoon in gasoline, MOC better bid in Sep EBOB MOC, with the Sep EBOB crack trading $35.70/bbl equivalent end of window. RBBRs initially weaker pre-US arb seeing arbs tanking across the curve, with the Q4 arb getting hit 15.15c/gal by a trade. RBBRs recover, but arbs continue to weaken, seeing Sep arb getting hit down to -4.20c/gal end of window. Real interest both side on the Nov/Dec/Jan/Feb condor this afternoon with $39/mt valued.

This afternoon in naphtha was quiet and choppy, with MOC better offered but limited interest through the window. NWE naphtha stayed under pressure from the morning, with Sep cracks falling to -$5.50/bbl post-window, while Q4 was around -$5.55/bbl, and Cal 27’ traded at -$8.10/bbl. Spreads were softer too, with Sep/Oct easing from $21/mt to $19.50/mt before ending around $20/mt, while Nov/Dec held around $21/mt. E/W was quiet and largely unchanged, with Sep holding around $46/mt, while Q1'27 was around $36.50/mt. MOPJ was illiquid on cracks and quiet on spreads, with Sep/Oct holding around $22/mt, though bid interest was closer to $21.25/mt post-window.

This afternoon in NGLs, FEI spreads had some initial buying in the deferred, seeing Dec/Jan trade at $18/mt, and Dec/Feb at $40/mt. Across the afternoon spreads softened slightly, and Sep/Oct closed end window trading at $34.50/mt, down from the day’s highs of $36/mt. There was also Major buyside of Q1/2'27 FEI at $75/mt, up $3 from last week’s closing level. Q4 LST/FEI was lifted at -$317/mt, and Oct traded up from -$344/mt to -$341.50/mt by the close of window. Importers returned on the buyside of the Sep ENT/FEI arb, lifting at -$390.50/mt, before it strengthened to print -$387/mt end window. Quiet afternoon in the US curves today. Deferred LST spreads had better buyside interest at US open, with Q4/Q1 trading at -0.375c/gal, and Q1/2'27 getting lifted at 3.75c/gal and 3.875c/gal, where it eventually closed end of the afternoon. Flat price across the curves were trading in line with crude.