Brent flirts with $90/bbl on rising US-Iran tensions…

In the news, US President Trump has extended the Jones Act waiver allowing foreign-flagged vessels to transport oil and other commodities between US ports for another 90 days. However, the administration has tightened the rules, with foreign vessels now requiring case-by-case approval rather than blanket exemptions from the Jones Act. The move aims to ease domestic transportation bottlenecks and support fuel supplies, with the White House saying the waiver has already boosted deliveries of gasoline, diesel and jet fuel. The US government has also sold two sanctioned oil tankers seized earlier this year for scrap, according to Lloyd’s List. Dubai-based vessel recycler Global Marketing Systems bought the tankers last month for an undisclosed sum, with the Era, formerly Marinera and Bella 1, and the Lileo, formerly Galileo and Veronica, set to be dismantled at Indian shipyards. The US Coast Guard and military special forces seized the Russian-flagged Era south of Iceland in January after a weeks-long pursuit, with Washington alleging that the vessel had been used to transport sanctioned oil from Venezuela and Iran. Elsewhere, Ukraine’s military has said that it attacked the Orsknefteorgsintez refinery in Orsk, Russia’s second-largest city in the Orenburg region and a major industrial hub. The refinery has crude processing capacity of around 6Mmt/yr and produces gasoline, diesel, jet fuel, fuel oil, bitumen and other petroleum products. Ukraine said a fire was recorded and the extent of the damage is still being assessed. In China, independent refiners are expected to increase Iranian crude purchases this month as Shandong stockpiles have fallen to their lowest level this year. Inventories dropped by around 35mb in July, the largest monthly draw since 2016, while China’s crude imports rebounded 22% m/m to 8.45mb/d, according to Bloomberg. Finally, as of the time of writing, the front-month (Oct/Nov) and 6-month (Oct/Apr’27) Brent futures spreads are at $2.28/bbl and $9.88/bbl, respectively.

This morning in Dated Brent, we initially saw strong Sep'26 DFL buying from a Sing trade up to $2.80/bbl (around $44.00/bbl on the dated to lead) before some better selling came in and it traded back down to around $25.00/bbl dated to lead and some selling of Balmo Aug'26 DFL. In the front of the curve, we saw a buyer of $11.00/bbl-17 Aug/Cal Sep'26, trading at $3.75/bbl, and a buyer of $11.00/bbl-17 Aug/Cal Oct'26, trading at $6.42/bbl. We also saw paper buy-side interest in 3-9 Sep/Cal Sep'26. Further down the curve, we saw a major buying Q1'27 DFL aggressively up to $1.20/bbl before some paper selling came in, selling $1.19/bbl. We also saw a Sing bank selling Dec/Jun'27 DFL at $0.90/bbl in decent size.

Strong morning in Dubai today. Spreads rallied, with Sep/Oct up 75c at the highs. Brent/Dubai sold off during the window from $6.85/bbl to $6.15/bbl, with a brief period of retracement and a continuation lower after that. Flows overall were dominated by Asian hedgers, with some trade interest in Q4 on the sell side.

Sing 0.5 opened higher this morning with the Sep'26 crack trading up to $19.40/bbl and $36.00/bbl Sep/Oct'26 trading up to $36.00/mt, however sell side interest remained on spreads with Sep/Oct'26 quickly trading down to $35.00/mt, this in combination with MOC selling pushed front cracks as low as $18.30/bbl, however the crack saw a bounce post window up to $18.80/bbl. Euro 0.5 was better supported with a real buyer on Sep'26 cracks between $7.20/bbl and $7.30/bbl; Sep/Oct'26 traded up a dollar to $24.00/mt. Euro 0.5 support put downward pressure on 0.5 E/W, which traded down to $72.50/mt.

HSFO opened much stronger this morning with Sep/Oct'26 380 at $27.50/mt, Sep'26 crack at -$3.50/bbl, and $380.00/bbl E/W at $43.25/mt. During the window, prices relaxed with Sep/Oct'26 trading down to $36.50/mt and the crack down to -$4.00/bbl; E/W saw real selling from Chinese down to $40.00/mt. 3.5% barges were not as active this morning; Sep'26 crack was range-bound, trading around -$10.40/bbl, while the spreads were fairly neutral, with Sep/Oct'26 trading at $12.00/bbl.

This morning in distillates, Sing gasoil spreads were well bid initially before flipping to the sell side, with Sep/Oct'26 trading from $6.50/bbl up to $7.00/bbl before coming back to $6.50/bbl post-window. Front E/W traded lower, down to -$72.50/mt in Sep'26, while Q4'26 was offered at -$58.75/mt. Regrade was well bid in the front at -$0.90/bbl, while kero spreads were offered in Sep/Dec'26.

Prompt ICE gasoil spreads rallied throughout, with Sep/Dec'26 trading from $160.00/mt up to $176.25/mt, while Oct'26 cracks rallied to $70.40/bbl.

This morning in Gasoline, MOC better bid. Singapore 92 opens stronger with buying in Sep crack at 19/bbl, with Sep/Oct crack roll trading $2.40/bbl but comes off throughout the window, seeing Sep E/W trading down to -$13.35/bbl post-window with the Sep/Oct crack roll trading $2.20/bbl equivalent. Sticky buying from refiner in Q4'26 E/W at -$4/bbl. Selling in Q3'27 EBOB crack seen this morning – trading down to lows of $16.30/bbl.

This morning in naphtha was weak overall. MOPJ MOC was better bid, but the wider tone stayed soft as cracks sold off from Sep'26 around $0.65/bbl down to $0.20/bbl, with Oct'26 near -$0.85/bbl and Nov'26 around -$2.20/bbl, while spreads were better offered in the front, with Sep/Oct'26 easing from $30.00/mt to around $29.50/mt. NWE naphtha opened better offered on prompt cracks, as Sep'26 cracks sold off from -$3.75/bbl to -$4.30/bbl, and Q1'27 down to -$7.10/bbl. Spreads were also under pressure, with Sep/Oct'26 spreads trading lower at $29.00/mt post-window, and Nov/Dec'26 softening to $15.00/mt before recovering slightly. E/W was quiet and low volume, with Sep'26 and Oct'26 broadly stable around $38.00/mt.

This morning in NGLs, there was some early selling of FEI flat price out of Oct'26 at $650.00/mt by Chinese players. Oct'26 LST/FEI initially lifted at -$290.00/mt before softening to -$294.00/mt end window as FEI was stronger on the day. Cal 27 LST/FEI also had better buyside interest, trading at -$187.00/mt, down $3 from last night’s close. Oct/Nov'26 opened better bid side, trading at $14.00/mt up to $14.50/mt, and Sep/Oct'26 FEI closed the morning at $26.00/mt, having opened at $25.00/mt. There was good buying of the Sep'26 LST/NWE arb at both -$147.00/mt and -$148.00/mt, and the Sep'26 Pronap was lifted at -$223.00/mt. Q1'27 FEI/MOPJ buying at -$73.00/mt, and the Q4'26/Q1'27 FEI/MOPJ roll was sold at -$2.00/mt. End window on screen Sep'26 FEI flat price was trading at $694.00/mt and $696.00/mt.

Brent crude oil futures is near $90/bbl as Libya’s oil infrastructure suffers drone attacks and traffic through the Strait of Hormuz remains extremely depressed. US strategic crude reserves are under 300 million barrels for the first time since they were filled above that level in 1983.

The yen is softening again after last week’s US intervention in the FX markets. It climbed to over 159/dollar yesterday – but remains more than 5 away from its recent high.

Triodos Bank research suggests Europe’s extremely hot summer could wipe out all expected EU GDP growth this year. This is partly due to lost workforce efficiency and a much more severe impact on agricultural output. The UK spent 10% more at pubs in July, thanks to the FIFA World Cup, but overall consumer spending disappointed at 1% growth y/y.

Australia’s Reserve Bank left the interest rate at 4.35% for a second straight meeting. However, the Board doesn't see inflation back at the 2.5% target until late 2027, and said another hike could be needed.

Activity, though, is cooling: NAB confidence is stuck at -6, below its pre-war level and 0.8% m/m growth in household spending in June is the slowest since February. The annual spending figure, up 6% y/y, also looks strong but this is more reflective of higher prices inflicted by the US-Iran war.

As a result, the 10-year Australian government bond yield pushed back above 5%, toward multi-week highs, even as odds of another 2026 hike slipped to 40% from 50%.

Data today: ADP employment change, Redbook, Existing home sales