Donna Dong
Research Analyst, Flux
Brent Falls to $91.60/bbl
Iran threatens to halt Gulf oil flows as US vows retaliation; India rations gas and Bangladesh scrambles for diesel supplies.
The May’26 Brent futures contract has fallen from $94.80/bbl at 05:00 GMT to $91.60/bbl at 10:10 GMT (time of writing).
In the news, Iran's Revolutionary Guards have announced that they will prevent any oil shipments from the Middle East if US and Israeli attacks persist. In response, US President Donald Trump stated that the US would retaliate more forcefully against Iran if the nation attempted to block exports. Trump also expressed confidence that the war would end before his initial 4-week timeframe, though he did not outline what a US victory would look like. In contrast, Israeli Prime Minister Benjamin Netanyahu has stated that Israel’s aspiration is to overthrow Iran’s system of clerical rule. Elsewhere, India has implemented emergency measures to redirect gas supplies from non-essential sectors to priority users following disruptions in LNG shipments via the Strait of Hormuz. A government notification stated that India will supply gas based on availability, prioritising sectors based on average consumption over the past six months. Top priority will go to supplying 100% natural gas to households and automobiles for fuel, followed by fertiliser plants, then tea industries/manufacturing/other industrial consumers, and finally small industrial and commercial clients. In light of the supply shortage, the nation will likely lean on its coal capacity to meet peak power demand this summer. In other news, Bangladesh has begun importing diesel from suppliers such as China and India. Officials have stated that the country currently has enough fuel to meet approximately one month of demand, and arrangements are in progress to secure enough for an additional month. Finally, at the time of writing, the front-month (May/Jun) and 6-month (May/Nov) Brent futures spreads are at $4.63/bbl and $16.10/bbl, respectively.
Related News
Rebalancing Act
Oil complex volatile but bullish: Brent eyes $100, spreads firm, cracks correcting short-term but uptrend intact.
9 page report
Brent Declines to $98.80/bbl
G7 holds off reserves release as Iran risks grow; India buys Russian crude and Saudi intercepts drones near key oilfield.
4 page report
East/West Ignition
Eastern gasoline leads the rally, the East/West flips positive, selling in deferred EBOB cracks
14 page report
Use the Force Majeure
Hormuz closure spikes naphtha cracks, but Asian petrochemical shutdowns curb demand. Expect volatile NWE strength, softer Asia prices
17 page report