Brent Eases as The US Agrees to Further Talks With Iran

In the news, US President Trump has said Iran requested that talks continue, with Washington agreeing to resume negotiations, though he reiterated that the June ceasefire is now "over." His comments follow this week's attacks on Qatari and Saudi commercial tankers, subsequent US strikes on Iranian targets, and Iran's retaliatory attacks on US military bases across the Gulf. Posting on Truth Social, Trump said: "The Islamic Republic of Iran has asked us to continue 'talks.' We have agreed to do so, but the United States has stated to them, in no uncertain terms, that the Cease Fire is OVER!" Elsewhere, Russian gasoline production has fallen to around 65% of typical seasonal average consumption after repeated Ukrainian drone strikes forced several major refineries offline, according to Reuters sources. Outages at NORSI, Omsk, and Saratov have widened the gasoline deficit to around 40-45kmt/d, equivalent to roughly 35% of peak summer demand, up from a 25% shortfall in June. In India, ONGC will build a new ~13mb strategic petroleum reserve in Mangalore, according to a stock exchange filing. The company said it will seek government approval for the facility's commercial use in the national interest. The new storage will add to India's existing strategic reserves at Mangalore, Padur, and Vizag, though the project timeline and cost have not yet been disclosed. In other news, Tajikistan's Energy Minister has said the country holds around 60 days of fuel reserves and is in talks with Kazakhstan, Turkmenistan, Iraq, Iran, and Belarus to secure future supplies, as fuel shortages continue to worsen in Russia. While exports of some petroleum products from Russia are ongoing, the minister acknowledged that supply difficulties persist. Finally, as of the time of writing, the front-month (Sep/Oct) and 6-month (Sep/Mar’27) Brent futures spreads are at $0.06/bbl and $1.86/bbl, respectively.

Very quiet afternoon in Dated. We saw a refiner buying 13-17 Jul vs Cal Aug at -$0.91/bbl and 13-17 Jul 2w trading -$0.70/bbl. Pre window we saw Aug DFL going a bit better bid pre window whilst also had some selling 20-24 Jul vs Cal Aug at -$0.55/bbl and 27-31 Jul vs Cal Aug at -$0.21/bbl. The window was quiet with a trade bidding a Midland cargo below curve leaving the implied phys diff unchanged. In the paper window we saw majors and trades selling CFDs with 13-17s printing -120 in 500x and 20-24s printing -90 in 400x.

In VLSFO, E/W continued to be bid this afternoon in Aug trading up to $64.25/mt. The strength was mostly seen in Sing 0.5, with spreads well bid going into the window. The Sing crack essentially became offerless in the front, implied up to $16.75/bbl by EoD. Aug/Sep Sing closed the day around $27.00/mt. The Euro crack was not as strong, due to E/W strength with Aug trading at $6.40/bbl at window close before ending the day around $6.60/bbl. Aug/Sep Euro was in fact a touch weaaker, trading down to $19.50/mt.

A largely queit afternoon on HSFO. There was some flat price buying on out of China which supported the 380 E/W up to $19.00/mt. 380 spreads also benefitted from better buying on higher crude, with Aug/Sep trading up to $3.75/mt. Barge cracks remained fairly rangebound, trading down a touch into the window as a result of MOC being offered, closing the week at -$8.25/bbl. Barge spreads also ticked down a touch, with Aug/Sep barges trading at $3.75/mt at the end of the window.

This afternoon in distillates, Sing gasoil spreads firmed, with Aug/Sep trading from $4.30/bbl up to $4.90/bbl. Front E/W sold off initially on higher cracks, moving down to -$71/mt in Aug, before rallying to -$68/mt post-window. Kero spreads saw scale-back offers, pushing Aug regrade from -$2.10/bbl down to -$2.30/bbl.

ICE gasoil spreads firmed initially before selling off into end window, Sep/Dec trading from $107/mt up to $115/mt, then back down to $106.25/mt. Cracks were also rangebound, with Sep moving from $54/mt up to $56.60/mt before coming back to $54.50/mt last. European jet diffs were stronger, with Aug firming to $63/mt while Q1 traded at $78/mt. Heating oil spreads and HOGOs weakened overall, with the Aug HOGO swap down to 30.9c/gal.

This afternoon in gasoline, EBOB flat price traded end window at $881.50/mt with MOC better bid. RBBRs came off, which pushed front arbs down from 29c/gal to 27.70c/gal with tradehouses scaleback bidding them. EBOB cracks saw buyside interest in Aug but came off with RBBRs, trading down from $31.10/bbl to $30.10/bbl before rallying to $30.80/bbl post window. Spreads were resilient, as Aug/Sep remained bid around $56/mt. E/W firmed from -$15.20/bbl to -$14.70/bbl with 92 cracks seeing scaleback buyside interest in Aug at $15.70/bbl and in Q4 at $11.15/bbl.

This afternoon in naphtha, Europe MOC a touch better bid with Europe crack trading up from -$2.70/bbl to -$2.40/bbl pre window. Pretty quiet during the window seeing sell side interest in the Bal/Aug spread at $27/mt with crack trading around -$2.40/bbl in Aug. E/W strengthens with MOPJ spreads better bid, with a trade house trying to buy Aug/Sep MOPJ – seeing Aug E/W gap up from $38.50/mt to $42/mt. Buyside interest in Sep/Oct/Nov fly at $3.50/mt with Aug/Sep naphtha crack roll valued $1.90/bbl.

This afternoon in NGLs, Aug/Sep FEI traded up to $12.50/mt before softening $0.5 by close to settle at $12/mt. In the deferred, Dec/Jan FEI was trading at $9.50/mt. LST/FEI interest at the front of the curve with Aug trading at -$235/mt and Sep with interest both sides at -$222/mt. There was also some Q4 arb selling at -$209/mt where it settled post window. Sep FEI/CP strengthened across the afternoon reaching a trading level of $59/mt, having been trading at $57/mt earlier in the morning. LST spreads had some buying in Aug/Oct at -0.75c/gal, and Q1/2'27 was lifted at 5.5c/gal. Similarly to yesterday there was buying of the Aug ENT/NWE arb and Aug Pronap at -$133/mt and -$155/mt. C4 ENT spreads also had buying, seeing Aug/Sep at -0.125c/gal. C4/C3 LST was trading in Q426 and Jan 27 at 21.125c/gal and 20c/gal.