Brent Hits $77.75/bbl as Iranian Oil Passes Blockade

Aug'26 Brent futures fell to $77.75/bbl at 08:12 BST before recovering to $79.51/bbl at 09:42 BST, softer at $78.64/bbl at 10:32 BST (time of writing). Overnight, the first tankers carrying Iranian crude oil have left the Strait of Hormuz since the US naval blockade began two months ago. Tanker Trackers confirmed at least two National Iranian Tanker Company supertankers, identified as Diona and Hero 2, have reportedly passed through the US naval blockade zone after loading about 3.8 million barrels of Iranian crude from domestic terminals, and are now en route to their destinations. G7 leaders called the US–Iran framework a “historic opportunity” to stop Iran from developing nuclear weapons and said it could bring stability to the region. They expressed support for the deal’s implementation and offered to help facilitate it. The agreement is reportedly set to be signed in Switzerland on 19 Jun by senior US and Iranian representatives. Iran has accused Israel of violating the Lebanon ceasefire 84 times since the MoU was agreed and is threatening a harsh response if the strikes continue. That threat hardened after Israeli forces killed four people in southern Lebanon on 16 June. Trump publicly rebuked Netanyahu at the G7, telling him he needs to be "more responsible". Iranian FM Araghchi has also sharpened Tehran's conditions for the deal to hold, stating publicly that the MoU must include the release of frozen Iranian assets, sanctions relief, and Israeli withdrawal from Lebanon. That last condition is a direct collision with Netanyahu's stated position, and Iran is framing Israeli actions in Lebanon as US violations, too, given its reading of the agreement. The IEA reported OECD oil stocks fell in May to their lowest level since 1990, as countries drew down reserves to offset disrupted Gulf crude flows during the West Asia conflict. The agency said inventories across wealthy nations have dropped by 163mb since the start of the crisis, despite earlier emergency releases of about 400mb. Finally, the Aug/Sep’26 and Aug/Feb’27 Brent futures spreads are at $0.15/bbl and $2.50/bbl, respectively.

Quiet morning in Dated with DFLs continue to trade lower. We saw Jul DFL trade down to $0.25/bbl and Aug DFL down to $0.42/bbl with strong Aug selling initially from a US major. Jul Aug DFL was sold down to -$0.20/bbl. We saw some selling out of Jul rolls with 13-31 Jul cal Aug sold at $0.31/bbl and cal Jul 27-31 Jul sold at $0.12/bbl. We saw some prompt balweek 1 day selling with 17 vs 24 June sold at $0.5/bbl and 18 vs 25 Jun offered at $0.5/bbl. Further down the curve we saw more Q4 and Q1 DFL selling before some buying came in from a major.

This morning in Brent/Dubai, we immediately started selling from the highs. There was some Chinese Sep Ice vs Jul Dub selling, and Dubai spreads were well bid on screen. We sold off from $7.90/bbl to $6/bbl, sell-side interest by major coming in around $6.20/bbl. There was smalls selling of Q3 and Q4'26 Brent/Dubai around $6/bbl and $3.40/bbl and the Cal'27 was trading $1.80/bbl, buy-side interest. The boxes all sold off, with the Jul/Sep moving down from $2.80/bbl to $1.90/bbl.

The VLSFO market saw more support this morning compared to the first couple days of the week. There was a fair amount of Hi-5 buying as well as crack buying on screen. The real support however came in Euro 0.5 which saw Jul/Aug Euro trade up to $19.50/mt from last nights levels of $16.00/mt. The Euro crack traded up to $6.00/bbl, however most liquidity was on screen. Sing spreads also saw strength with Jul/Aug Sing up to $13.50/mt. However E/W boxes still came under some pressure. It was a similar story on Sing crack which was stronger, closing the morning at $11.80/bbl. However the 0.5 E/W in the front was implied lower to around $37.00/mt.

The HSFO complex continued to drift lower today as it has done the whole week. The front spreads has gone into contango, trading down to -$2.75/mt from $2.25 close last night. The crack was also weaker due to both spread weakness as well as Chinese selling on 380 dated cracks. The Jul 380 cracks traded down to -$9.25/bbl from -$6.75/bbl. The E/W came under pressure as a result also turning negative, closing the morning at -$4.00/mt in July. The barge crack traded down a touch due to 380 weakness, selling down to -$8.80/bbl, however there was not a huge axe on barges. Barge spreads were largely unspoken today with Jul/Aug barges implied around $3.25/mt.

This morning in gasoline, flat price traded end window at $97.60/bbl with MOC balanced. The east was stronger, as Jul cracks got bid up from $18.30/bbl to $18.65/bbl, and Q3 saw mixed interest at $15.30/bbl. Spreads saw better buy-side interest as well from refiners, as Jul/Aug firmed from $3.75/bbl to $4.20/bbl. E/W opened higher at -$6.50/bbl, with EBOB cracks weaker; Jul was trading at $25.30/bbl. Spreads were better bid, though, with Jul trading up from $22/mt to $23.50/mt.

This morning in Naphtha, MOC better bid with phys players lifting +5c in both July and Aug MOC. Cracks touch stronger from close, with trade selling Aug MOPJ crack at -$3.30/bbl, with sell-side interest in July at -$3/bbl. E/W in Jul trading up to $33/mt end of window with buyside interest in both Q4 and Q1 E/W, trading at $31.25/mt and $26.25/mt respectively. In Europe, Q1'27 trades -$8/bbl with the Q4/Q1 crack roll trading up to $0.40/bbl.

This morning in NGLs, Chinese were early FEI flat price sellers out of Aug and Oct at $587/mt and $583/t respectively. FEI spreads opened stronger than yesterday’s trading levels, with Aug/Sep trading at $6/mt and Jul/Aug at $16/mt, up from $3.50/mt and $12/mt last night. Also had a Major on the sell side of Q4 FEI at $587/mt. Jul LST/FEI traded at –$238/mt before strengthening to settle at -$232/mt end window. Little action in CP compared to yesterday, but the Jul FEI/CP was lifted at $30/mt before rallying to $33/mt into close. End window on screen Jul FEI flat price was lifted at $614/mt.

FOMC decision due today at 14:00 ET / 21:00 SGT — Warsh's first meeting as Fed Chair. The rate held at 3.50–3.75% is priced at ~97%; the real action is in the dot plot and Warsh's 14:30 press conference. March's median dot showed one cut in 2026; June's update is expected to remove it, with BofA flagging at least three members projecting hikes.

US CPI context driving the hawkish lean — Headline CPI accelerated to 4.2% YoY in May, the third consecutive monthly pick-up. Energy costs jumped 23.5% YoY, with gasoline up 40.5%. Core CPI was softer at +0.2% MoM and 2.9% YoY — half April's monthly pace.

G7 Évian summit concludes today — France hosted a video call between G7 leaders and China on the sidelines to address global trade imbalances. Macron's push for coordinated action against Chinese industrial overcapacity has struggled to land; Trump's bilateral agenda on China has dominated over multilateral deliverables. No firm China trade agreement expected out of the communiqué.

Chinese retail sales contracted 0.6% in May YoY, the first monthly fall since December 2022, reversing April's marginal 0.2% rise. Fixed-asset investment fell 4.1% in Jan–May, well below the -2% forecast. Industrial output beat at +4.5% but the demand side picture is clearly weakening under the weight of the conflict-related supply shock.