Brent Recovers as Oil Tanker Attacked Near Black Sea Terminal

In the news, an oil tanker chartered to load crude at the Caspian Pipeline Consortium (CPC) terminal in Russia's Black Sea was damaged in a drone attack, according to CPC. Reuters sources identified the vessel as the ExxonMobil-chartered Nordic Zenith. The attack sparked a fire onboard, which was later extinguished. CPC said the tanker has been removed from the loading schedule and is no longer fit for mooring or loading operations. Elsewhere, China will raise domestic gasoline and diesel prices from 18 Jul following the recent rally in crude prices driven by the escalating US-Iran conflict. The NDRC announced increases of CNY 300/mt for gasoline and CNY 290/mt for diesel, reversing the price cuts implemented earlier this month after two previous reductions in June. In other news, South Korea has increasingly shifted crude imports to Saudi Arabia's Yanbu export terminal via the Red Sea since the Iran war. The country's Ministry of Oceans and Fisheries confirmed that another tanker has successfully transited the Red Sea and is now en route to Asia, marking the 14th shipment to use the route since the conflict began. The ministry described the Red Sea as the most viable alternative while Hormuz remains unstable. However, this route could also come under threat, with reports suggesting Iran has instructed the Houthis to prepare to close the Bab el-Mandeb Strait, potentially disrupting Red Sea exports as well. Finally, at the time of writing, the front-month (Sep/Oct) and 6-month (Sep/Mar’27) Brent futures spreads are at $1.48/bbl and $6.81/bbl, respectively.

Very choppy afternoon in Dated with strong buying of prompt Aug rolls into the afternoon pushing up the market before better selling came in pre-window. We saw buying of 6-12 Aug vs Cal Aug up to $0.20/bbl and 3-7 Aug vs Cal Aug up to $0.16/bbl. We then saw some Balmo selling come out pre window with Bal Jul Aug DFL trading down to -$2.00/bbl and Aug selling down to $0.94/bbl. The window was pretty quiet with a British major selling CFDs but also some paper on the buy side. We saw market makers lifting CFDs in the window having sold into Aug roll buying earlier in the day. The physical window was bidless and offerless.

A fairly rangebound end to the week on VLSFO. Spreads traded down a touch earlier in the afternoon, Aug/Sep down to $39.25/mt, however closing where they came into the afternoon around $40.00/mt. It was a similar story on Euro spreads which traded around $20.75/mt throughout the afternoon. Cracks moved in unison with the Aug Sing and Euro crack trading up $20.40/bbl and $7.45/bbl respectively.

A stronger end to the week on HSFO. 380 cracks were better supported with spread buying coming into the market in the afternoon. The 380 crack traded up to -$3.50/bbl from -$4.00/bbl while Aug/Sep 380 closed the week at $14.00/mt. The barge crack went bid in the window trading up to -$7.80/bbl in Aug while Aug/Sep barges ended the week $8.00/mt.

This afternoon in distillates, Sing gasoil spreads remained scale back bid as ICE gasoil came off, with Aug/Sep trading from $7.15/bbl down to $7.07/bbl. This supported front E/W, with Aug trading from -$65/mt up to -$59.50/mt post window. Regrade went well bid overall, trading from $2.50/bbl this morning up to $4/bbl lifted in Q4.

Prompt ICE gasoil spreads sold off overall, with Sep/Dec trading from $165/mt early afternoon down to $155/mt post window, while cracks sold off from $65.90/bbl down to $64.10/bbl in Sep. European jet diffs weakened overall, with Aug trading from $84/mt down to $80/mt, while Q4 traded from $106/mt down to $100/mt. Heating oil spreads sold off, while HOGOs firmed early afternoon before selling off into the end window, Aug HOGO swap from 29.6c/gal up to 30.4c/gal, then back down to 29.5c/gal.

It was a strong afternoon in gasoline. RBBRs rallied around 1.50 dollars, pushing Aug arbs from 26.20c/gal to 27.40c/gal. EBOB cracks were strong, firming from $36.50/bbl to to $37.60/bbl in Aug, with Q4 trading at $16.50/bbl. Spreads were bid, with Aug/Sep trading up from $73/mt to $75/mt on higher Brent and RBBRs. EBOB strength pushed the E/W down from -$14.30/bbl to -$15.50/bbl with 92 cracks valued at $22/bbl in Aug.

This afternoon in naphtha, quiet window with interest in nap MOC mixed. Aug/Sep Europe touch better offered getting hit down to $33/mt with market makers sell-side. Crack buying in Aug up to -$2.10/bbl end of window, with -$2.25/bbl also trading end of window. Choppy afternoon for E/W, seeing Aug E/W gapping from $46.50/mt to $51/mt.

This afternoon in NGLs, FEI continued to be strong, with Aug/Sep trading up to $34/mt, having begun the afternoon at $30/mt. Sep/Oct also strengthened $1 to close the afternoon at $18/mt. As FEI remained strong, LST/FEI sold off down to the $301/mt level, where it eventually settled end window. Sep LST/FEI was trading at -$264/mt on the afternoon. LST spread buying in the deferred, seeing Q4'26/ Q1'27 trading at 0.125c/gal where it closed the afternoon. Cal'27 LST was getting lifted at 73.875c/gal. In butane, there was also some deferred spread buying, seeing Q3/4'27 at -1.375c/gal and Q2/3'27 was trading at $1/mt. C4/C3 selling out of Cal'27 at 16.5c/gal, before it strengthened to 17c/gal at the end of the afternoon. There was also Cal'27 Bunap buying at -$200/mt.