Brent rises as Trump says ceasefire with Iran is “over”

This marks the highest level for M1 Brent futures since 22 Jun, amid an escalation of conflict between the US and Iran. The news began with the US reinstating its sanctions on the sale of Iranian oil following a series of attacks on tankers in the Strait of Hormuz, allegedly by Iran. The US military subsequently said it was launching a series of strikes against Iran, with explosions reportedly heard on Iran's Kharg Island. In an official statement, Iran's military said that the Armed Forces of the Islamic Republic of Iran will deliver a “ crushing response ” to the US actions and will not allow any outside interference in the management of the Strait of Hormuz, declaring that the only safe passage for commercial ships and oil tankers through the strategic waterway is the route designated by Iran. US President Donald Trump has said he believes the memorandum of understanding the US held with Iran is "over", adding that he does not want to engage with Tehran. In other news, China has reportedly lifted its refined product export restrictions to approximately 3.5 million mt (gasoline: 500,000 - 600,000 mt, gasoil: 800,000-900,000 and kerosene: 2.1 million mt) for the rest of July, with sources claiming that Rongsheng has received a new refined product export quota after it halted exports for more than three months. Ukrainian drones struck three Russian oil refineries overnight, including the Omsk refinery, Russia's largest, along with Russian tankers on the Sea of Azov, according to the Ukrainian military and Russian local officials. According to Reuters, a CDU, which accounts for 38% of the Omsk oil refinery's production capacity, with a capacity of 24,580 metric tons a day, caught fire and was damaged in the attack. Another CDU at the refinery (37% of the plant's capacity) was also halted despite not being hit as some network links essential to its operation were damaged. Finally, at the time of writing, the Sep/Oct'26 and Sep/Mar'26 Brent futures spreads stand at $0.61/bbl and $3.12/bbl, respectively.

This morning in Dated Brent, we saw Aug DFL trade up to $0.76/bbl with the Dated-to-Lead trading up to positive levels, and Balmo Jul DFL trading up to -$0.05/bbl. We saw buying of 21-27 Jul vs 27-31 Jul at $0.14/bbl and buying of 3-7 Aug 2w. However, we saw selling of 20-31 Jul vs Cal Aug at $0.07/bbl and 20-24 Jul 2w at -$0.18/bbl. Further down the curve, we saw strong Q4'26 DFL buying as well as buying of Q1'27 and Q2'27 DFL.

A strong start to the morning on VLSFO. Euro spreads were bid out of the US last night, and the buying continued this morning in both regions. Sing 0.5 spreads were bid on higher crude with Aug/Sep trading up to $18.75/bbl from overnight levels of $14.00/mt. The crack was also supported by spreads strength trading up to $14.30/bbl from $13.00/bbl. Euro spreads continued to see buying this morning, however, supported by Sing strength with Aug/Sep closing the morning around $16.00/mt from $12.00/mt. Euro cracks were also up, although they were not as supported due to continued E/W buying, with Aug Euro cracks inching up to $5.50/bbl from $4.70/bbl.

A similar story on HSFO this morning, which saw 380 spreads stronger on higher crude. Aug/Sep 380 traded up to $3.25/mt from $1.00/mt. While cracks were initially slow to get started, they got as high as -$6.25/bbl. 380 E/W and barge cracks were better bid as the morning progressed, with Aug 380 E/W closing the morning around $14.50/mt and the front barge crack at -$8.70/bbl. Barge spreads were implied higher with Aug/Sep barges up to $4.00/mt from $2.75/mt last night.

This morning in distillates, Sing gasoil spreads were offered in Aug/Sep, trading down to $2.45/bbl before ripping post-headline to $3.00/bbl last. The gasoil E/W opened lower, with Aug getting hit down to -$75/mt on screen before rallying to -$68.50/mt, while Sep traded up to -$60.25/mt. Regrade remained bid in Aug, stepping up to -$1.50/bbl, while Aug/Sep kero was offered higher at $2.00/bbl.

ICE gasoil spreads sold off initially before popping into the end window, with Sep/Dec moving down to $83.25/mt before rallying back to $94.50/mt. Cracks firmed overall, with Sep back up to $50.00/bbl. Heating oil spreads were range-bound, while HOGOs sold off, with the Aug HOGO swap down to 28.60c/gal.

It was a volatile morning in gasoline. Sing 92 was initially very weak, with cracks getting sold down from $15.20/bbl to $14/bbl before getting lifted back up to $15.30/bbl on the news. 92 spreads followed the same pattern, as Aug/Sep came off from $2.85/bbl to $2.20/bbl before rebounding to $2.90/bbl. The gasoline E/W strengthened from -$14.50/bbl to -$14/bbl, with EBOB going better offered. Cracks weakened from $29.50/bbl to lows of $28/bbl, but spreads were better supported on higher Brent spreads, with Aug/Sep firming from $49/mt to $50.50/mt.

This morning in Naphtha, MOPJ MOC was slightly better offered with small volumes trading in terms of MOC today. Aug Nap crack traded down to lows of -$5/bbl on higher crude with spreads rallying across both MOPJ and Nap this morning. The naphtha E/W was stronger with MOPJ spreads finding better buying than Europe spreads, seeing Aug E/W trade up to $44/mt with boxes pricing higher in the prompt.

This morning in NGLs, we had some significant moves post the announcement in regard to the memorandum. FEI began the day trading at $603/mt and began to soften, with spreads also weakening. Aug/Sep traded from $10/mt to $8/mt, and Sep/Oct was trading down to $2/mt. With weaker FEI, LST/FEI found some strength, trading up to -$213/mt. Following the announcement, the front FEI flat price rallied, and spreads came with it, seeing Aug/Sep trading up to $14/mt, and Sep/Oct at $4.50/mt. One of the biggest moves was in LST/FEI that sold off down to -$230/mt in Aug, and Sep was trading at $215/mt, having been lifted at -$205/mt earlier in the morning. FEI/CP also was trading up on the news. Having been lifted at $46/mt, Aug FEI/CP rallied to close at $59/mt at the end of the window as the CP flat price remained stickier on the crude move. Aug FEI/MOPJ was trading at -$84/mt, down from yesterday’s closing level of -$77/mt. End window on screen, Aug FEI flat price was hit at $613/mt.

17 minutes after the NYSE closes, the US strikes 80 targets in Iran; the strikes were 4 to 5 times larger than the round 10 days ago, per a US official.

With Brent up 6% from Friday’s close, we see the usual rotation in this US-Ian repeating cycle: equities lower (S&P futures -0.8%, Nasdaq -2.1%), yields higher (2-year & 10-year both 8bp higher), precious metals lower (gold -1.4% & silver -2.7%) and the dollar higher. Over 50% of Nasdaq stocks are now in a bear market, but until the Nasdaq composite breaks 25,000, longs will remain bullish.

Stocks are the most expensive ever, but trade the price, not the bearish narrative!

Elsewhere, the Kospi has broken support (officially a bear market!) down another 5.4% today after more circuit breakers (Bloomberg), and Japanese yields continue higher with 10s up another 3bp (highest since 1996).

AI compute prices remain weak just as data centre providers - already deeply unprofitable even at peak pricing - face pressure on margins, forcing a shift from subsidised subscriptions to token-based billing that reveals LLMs cost 10-20x more than customers were told. The IPO push from SpaceX, Anthropic, and OpenAI is a sign that these companies are racing ahead of a coming double hit of falling demand and shrinking margins.

Record Stock Concentration is not a healthy market. With market concentration so high and everybody in the same trades, the likelihood is greater that a significant drawdown will lead to a curbing of risk limits and further deleveraging. Banks would act as an accelerant as they supply a record amount of equity leverage to the market (to leveraged ETFs, for instance).

Amazon Sells Another $25BN Bonds As Goldman Urges Clients To Start Hedging AI Debt Bubble

Striking chart from the Chinese real estate market, showing that prices have collapsed to multi-decade lows.

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