Brent Fallen On Hopes of Peace Deal This Week

In the news, US Secretary of State Marco Rubio said talks with Iran and Oman on increasing shipping through the Strait of Hormuz are making progress, although no final agreement has been reached. Treasury Secretary Scott Bessent added that a deal to reopen the Strait could come as soon as Tuesday or Wednesday. Separately, Qatar's Foreign Ministry said diplomatic efforts to resolve the Iran war remain ongoing. In Syria, the country has agreed to significantly reduce imports of Russian oil as part of ongoing discussions with the US over removing the country's remaining major sanctions designation, according to Reuters sources. The move would mark a major shift for Syria, which has become increasingly reliant on Russian crude despite its recent political pivot towards the West, while also giving Washington another lever to weaken Russia's influence in the country. Reuters reports that Syrian officials have indicated in recent months they are willing to cut Russian oil imports in exchange for being removed from the US list of state sponsors of terrorism. In Japan, strategic crude reserves increased by three days to 202 days of consumption in July, despite ongoing disruptions from the Iran war, as the country secured alternative supply sources, according to METI. Combined public, private and jointly held reserves stood at 202 days of domestic consumption as of 01 Aug, following declines in April, May and June. Japan has not made any further decisions to release stockpiles since May. In other news, Russia’s seaborne oil product exports fell by around one-third m/m to 3.9mt in July, as Ukrainian refinery attacks and export restrictions weighed on fuel production and shipments, according to market sources and LSEG data. Diesel and gasoil exports declined by around 60% to 0.75mt, while naphtha exports fell 35% to 0.8mt as domestic fuel demand remained strong. The decline follows Russia’s temporary diesel export ban, introduced to protect domestic supply and later extended through August. Finally, as of the time of writing, the front-month (Oct/Nov) and 6-month (Oct/Apr’27) Brent futures spreads are at$1.60/bbl and $5.37/bbl, respectively.

This afternoon in Brent/Dubai we fully reversed the mornings move lower. There was some Chinese buying of Oct'26 Brent swap vs Sep'26 Dubai, which sent the market higher. As we rallied, we saw tradehouse buyside interest come into the market. There was buying of Oct/Nov'26 Brent/Dubai box around $0.60/bbl, coming off after it was taken out. The Dubai spreads trended down the whole day with the Sep/Oct'26 trading down sharply from this mornings rally, down from $1.67/bbl to finish the day at $0.65/bbl.

In HSFO, Sing spreads continued to weaken this afternoon especially on lower crude. Sep/Oct'26 Sing closed around $36.50/mt from $39.50/mt around mid day. The crack was more stable trading between $19.70/bbl and $20.00/bbl. Euro cracks barely moved trading around $8.00/bbl. Euro spreads did however weaken on lower crude with Sep/Oct'26 implied down to $24.00/mt. 

In VLSFO, 380 gave back most of the gains it got this morning. 380 E/W traded down to $39.25/mt from the highs of $42.00/mt off the back of bearish sentiment in the market. 380 spreads came off due to the same sentiment in the market. Sep/Oct'26 380 sold down to $22.25/mt. Barge cracks initially traded up to -$9.35/bbl on a weaker E/W however the crack came off in the window ending the day around -$9.55/bbl. Barge spreads were lower on lower crude as well with Sep/Oct'26 trading down to $9.75/mt at the end of the window.

This afternoon in distillates, Sing gasoil spreads saw sell side interest on lower IPE, with Oct/Nov'26 hit from $5.50/bbl down to $4.90/bbl, while front E/W sold off from -$63.00/mt to -$67.00/mt on physical selling in bal E/W. Regrade was supported in the front, with Sep'26 trading from -$0.70/bbl up to -$0.50/bbl, while front kero spreads saw some buying on lower IPE.
Prompt ICE gasoil spreads sold off early afternoon before firming into the window, with Sep/Dec'26 trading from $145.00/mt down to $113.50/mt before recovering to $135.50/mt last. Oct'26 cracks firmed from $59.00/bbl up to $61.50/bbl into the end window. European jet diffs were offered into Q4'26, with Sep'26 trading down to $90.00/mt while Oct'26 traded at $98.00/mt. Heating oil spreads were range-bound, while HOGOs firmed, with the Sep'26 HOGO swap up to 28.50c/gal.

It was a weak evening overall in gasoline, with the East under pressure through the afternoon before EBOB recovered strongly post-window. EBOB was softer in the early afternoon, with Sep'26 cracks down to $24.40/bbl and Oct'26 around $18.40/bbl, while spreads were still relatively supported, with Sep/Oct'26 around $67.00/mt and Oct/Nov'26 around $41.25/mt. Post-window, Sep'26 cracks recovered to $26.10/bbl, with Oct'26 around $18.80/bbl and Q4'26 softening to $15.30/bbl, while spreads firmed, with Sep/Oct'26 at $70.00/mt. Arbs were supported earlier, with Sep'26 around 13.30c/gal, before easing to 12.50c/gal post-window. 92 saw the sharpest move:  Sep/Oct'26 cracks traded down to $16.00/bbl and $14.40/bbl respectively, and spreads better offered, with Sep/Oct'26 at $3.10/bbl and Oct/Nov'26 at $2.10/bbl. E/W weakened with the East, with Sep'26 moving from around -$9.15/bbl  to -$10.00/bbl post-window

This afternoon in naphtha, MOC better offered with nap crack continuing to sell off, trading down to -$4.55/bbl in Sep'26 but firming slightly higher at -$4.40/bbl by end of window, with buying in Sep/Dec'26 NWE crack roll at $2.00/bbl. Sep/Oct'26 MOPJ initially aggressively offered but then we see it gap higher once the selling was taken out, trading up from $16.00/mt to $19.00/mt on a flat price basis. Buying in Jan'27 MOPJ flat price this afternoon from a Chinese fund. Selling in Cal 27 naphtha crack today, valued -$8.55/bbl pre window and -$8.40/bbl shortly after.

This afternoon in NGLs, FEI flat price was came off with crude, and as a result the spreads followed. Sep/Oct'26 FEI sold down to $19.00/mt, from $22.00/mt this morning, and Dec/Jan'27 was trading at $11.00/mt, $2 weaker than the opening level today. There was scale back sell side interest in FEI/MOPJs across the afternoon, with Q4'26 trading at -$61.00/mt to -$58.00/mt, and Q1'27 was trading at $61.00/mt, up from last night’s close of $66.50/mt. As FEI weakened, as did the FEI/CP, seeing Sep'26 initially trade at $72.00/mt to begin the afternoon, before printing $62.00/mt end window, and Oct'26 came off $3.50/mt from a trading level of $80.00/mt. Q4'26 LST/FEI was trading at -$239.00/mt at the end of the afternoon, having been at -$250.00/mt earlier in the day. LST spreads had good buying in the deferred, with Q2/3 27 lifted at 0.25c/gal, and Cal 27/ Cal 28 trading at 3.25c/gal. In the front, Sep/Oct'26 LST traded up from -0.125c/gal to -1.00c/gal. A very quiet afternoon in butane, but there was some deferred spread buying. Dec/Jan'27 traded at 1.00c/gal, and Jan/Feb'27 was lifted at 1.875c/gal. C4/C3 LST trading in Q1'27 and Cal 27 at 23.125c/gal and 16.75c/gal respectively.