Brent falls alongside Iranian-Omani plan to de-mine the Strait of Hormuz

In the news, Oman and Iran have agreed on a proposed framework to resume safe navigation through the Strait of Hormuz, which includes establishing a joint temporary shipping lane and a project to de-mine the waterways, according to a joint statement published on 25 Aug. Meanwhile, US President Donald Trump has said that "all mines have been removed and/or detonated from within the International Waters of the Strait of Hormuz", in a Truth Social post. Nevertheless, shipping risks remain high, with only two tankers transiting the Strait of Hormuz on 24 Aug, the lowest daily level recorded since early May, according to Reuters. An oil tanker was struck on 25 Aug by an unidentified projectile and was disabled about nine nautical miles (16.7 km) northeast of Oman's Ash Shishah, as per the UKMTO. Elsewhere, freight rates for tanker shipments of Russia's flagship Urals crude from India's western ports have surged in August amid strong demand and mounting security risks. In Russia, the Novoshakhtinsk ⁠oil refinery in the nation's southern Rostov region was damaged by a Ukrainian drone overnight on 25 Aug and has suspended operations. A fire briefly broke out at the Atyrau refinery in western Kazakhstan on 25 Aug, but this has been fully extinguished, as per KazMunayGas. Finally, at the time of writing, the Oct/Nov'26 and Oct/Apr'27 Brent futures spreads stand at $1.43/bbl and $8.86/bbl, respectively.

This afternoon in Dated Brent, we saw the market continue to sell off pre-window with Sep/Oct'26 DFL selling down to -$0.55/bbl, with Chinese selling Sep'26 DFL down to $1.48/bbl; however, the market bounced back in the window. In the physical window, we saw 3 Midland cargo offers, pushing the implied diff down. In the paper window, we saw a major and a trade selling CFDs, with 1-4 Sep'26 CFD trading at $0.90/bbl and $7.00/bbl-11 Sep'26 CFD trading at $1.35/bbl. Post window Sep'26 DFL bounced back with better buying and $5.00/bbl-9 Oct'26 1w was lifted at $0.65/bbl.

This afternoon in Brent/Dubai, we traded rangebound, coming off this morning's highs in the Sep bd. We traded between $2.50/bbl and $3/bbl. We saw refiner buy-side interest in Oct and Nov EFS, but trade and major selling this and offering Sep and Oct Brent/Dubai. The Sep/Oct Dubai spread recovered its morning move lower, trading up from $3.40/bbl to $3.90/bbl. This was in large part due to the Oct EFS buying, which saw the Sep/Oct Brent/Dubai box move lower from -$1.35/bbl to -$1.7/bbl. The other boxes traded largely range-bound. There was some trade buying of Sep/Oct/Nov Dubai spread, which traded up from $1.81/bbl to $1.90/bbl.

In VLSFO, Sing 0.5 spreads continued to trade lower on lower crude; Sep/Oct'26 380 shed a dollar, trading down from $33.00/mt to $32.00/mt. Sing cracks were relatively stable this afternoon, with Sep'26 crack trading between $18.60/bbl and $18.70/bbl. Euro 0.5 spreads traded higher this afternoon, although they were not as liquid this morning. Sep/Oct'26 Euro was bid up from $21.50/mt to $22.25/mt, where it is currently trading. Sep'26 Euro crack was range-bound, trading between $6.25/bbl and $6.45/bbl. Sep'26 0.5 e/w was therefore implied slightly lower at $78.00/mt.

In HSFO, 380 continued in the same vein as this morning; Sep/Oct'26 380 continued to be offered this afternoon, bottoming out at $35.75/mt during the window and then bouncing back up to $36.00/mt post window. Sep'26 380 crack traded down to -$0.40/bbl on low liquidity. 3.5% barge spreads were stable this afternoon with Sep/Oct'26 trading between $9.00/mt and $9.25/mt; Sep'26 Barge crack traded between -$11.00/bbl and -$11.15/bbl during the window in decent volume.

This afternoon in distillates, Sing gasoil spreads firmed on higher ICE gasoil, with Sep/Oct'26 trading from $4.40/bbl up to $4.55/bbl. Front E/W sold down to -$91.00/mt before turning better bid and trading back to -$89.50/mt last. Oct'26 regrade was well offered, hit down to -$1.84/bbl on screen, while Oct/Dec'26 kero traded at -$4.25/bbl.

Prompt ICE gasoil spreads moved higher initially before selling off, with Sep/Dec'26 trading from $122.00/mt up to $130.00/mt before coming back to $126.00/mt, while Oct'26 cracks rallied to $72.75/bbl then trading back to $71.00/bbl. European jet diffs saw some strength in Sep'26, trading up to $42.00/mt. Heating oil spreads sold off, while HOGOs were range-bound, with the Sep'26 HOGO swap at 28.00c/gal.

This afternoon in gasoline, EBOB MOC was better bid for decent size in Sep'26, with Sep'26 EBOB crack finding selling at $39.05/bbl at the end of the window. Sep/Oct'26/Dec'26 fly trading higher today, getting lifted up to $4.00/mt this afternoon – up from this morning's trading levels of $3.00/mt. RBBRs stronger this afternoon with RINs getting lifted - seeing prompt Arb whippy, with  Sep'26 Arb trade down from -6/gal to -6.80/gal during window but higher post window, seeing -5.4/gal getting bought. Continue to see sell side interest in Q1'27 arbs from trade this afternoon, seeing 26.3/gal getting sold post window. E/W continues to trail lower, seeing small buying in Sep'26 E/W on screen this afternoon, getting hit on screen at lows of -$20.50/bbl.

This afternoon in naphtha was choppy and lacked real interest, with quiet NWE MOC and low liquidity throughout. NWE naphtha cracks were supported earlier by gasnap selling but remained volatile, with Sep'26 falling further to -$4.70/bbl before recovering to -$4.30/bbl in the window and ending closer to -$4.50/bbl, while Q4'26 traded up to around -$5.10/bbl and Q1'27 around -$6.40/bbl. Spreads softened, with Sep/Oct'26 coming off from $19.75/mt this morning to $18.25/mt post-window, while Nov/Dec'26 was around $19.00/mt. E/W rallied through the day, with Sep'26 moving from $51.00/mt this morning to $53.50/mt,  Q4'26 around $47.00/mt, and Cal 27’ trading at $28.00/mt. MOPJ was firmer on cracks pre-window before liquidity dried up, with Sep'26 up from $0.90/bbl to $1.40/bbl, while spreads were choppy but broadly softer versus the morning, with Sep/Oct'26 down from $24.00/mt to $21.50/mt before recovering towards $23.00/mt and Oct/Nov'26 around $22.50/mt post-window.

This afternoon in NGLs, FEI spreads had mixed interest, seeing Sep/Oct'26 trade up to $35.50/mt, and Nov/Dec'26 get lifted at $17.00/mt. Q1/2 27 FEI was also bought at $71.00/mt to start the afternoon, before weakening to $69.00/mt in the end window. Sep'26 LST/FEI traded up from -$370.00/mt to -$367.50/mt as FEI flat price was weaker, and in the deferred, Q4'26 LST/FEI was trading at -$304.50/mt. The Oct/Nov'26 arb roll was also getting sold at -$26.50/mt. Another very quiet afternoon in the US curves. Sep/Oct'26 LST traded at -0.125c/gal across the afternoon, and Q4'26/Q1'27 was going at -0.375c/gal, the same as yesterday’s closing level. In butane, Sep/Oct'26 C4 ENT was trading at -0.75c/gal, and Sep'26 C4/C3 LST was printing 50c lower than yesterday's close at 35.00c/gal.