Giovanni Simonetti
Junior Data Analyst, Flux
Brent Recovers to $83.80/bbl
Asian refinery margins, China orders refiners to stop exporting gasoline and diesel, EU gas prices rise
The May’26 Brent futures contract rallied to $84.71/bbl at 06:00 GMT, before falling to $81.66/bbl at 09:10 GMT. Prices have since recovered to $83.80/bbl at 10:30 GMT (time of writing).
In the news, Asian refining margins have surged to their highest levels since 2022 amid disruptions in the Strait of Hormuz that have restricted crude flows to the region. The chokepoint normally handles over 20% of global oil supplies, and shipping threats have forced some refineries to cut processing rates. Jet fuel and diesel margins led the rally, with aviation fuel margins exceeding $52/bbl and gasoil cracks rising above $48/bbl. Tight crude availability is also lifting naphtha and fuel oil margins. China has ordered its major refiners to suspend exports of gasoline and diesel. The directive from the National Development and Reform Commission instructs companies to halt new export contracts and renegotiate existing shipments, with limited exceptions such as jet fuel in bonded storage and supplies to Hong Kong and Macau. Firms including PetroChina, Sinopec, CNOOC, Sinochem Group, and Zhejiang Petrochemical are affected. In other news, Europe faces a difficult and costly task refilling gas storage for next winter after the US-Iran conflict disrupted Middle East LNG supply and shipments. The shutdown of Qatari facilities has driven European gas prices up nearly 50% and increased competition with Asian buyers for cargoes. Europe must secure around 67Bn cubic metres of LNG, or roughly 700 cargoes, to refill storage this summer, with costs now estimated at about $40Bn. Storage levels may fall to just 22-27% by the end of March, raising concerns about supply shortages and potentially triggering a price surge similar to the 2022 energy crisis. Finally, at the time of writing, the front-month May/Jun’26 and six-month May/Nov’26 spreads are at $3.69/bbl and $10.85/bbl respectively.
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