Brent rises as US increases pressure on Iran

In the news, US President Donald Trump has threatened "economic warfare and isolation on an unprecedented scale" against Tehran, warning of consequences to any country that provides "any lifeline" to the nation. US Treasury Secretary Scott Bessent will reportedly hold a press conference on 24 Aug to talk about the US' plans with Iran. This places focus on China, the biggest buyer of Iranian oil, which could face additional pressures from the US. In other news, Mauritius has reportedly signed long-term supply agreements with India's government to import oil products. Indian Oil Minister Hardeep Puri said Mauritius was the first country outside of South Asia to reach such an agreement with an Indian public-sector oil company. The UK's Office for National Statistics (ONS) said that the British economy grew slightly faster in 2023 and 2024 than previously thought, with annual GDP growth in 2023 and 2024 revised up by 0.1% in each year - lifting the 2024 growth rate to 1.1%. Finally, at the time of writing, the Oct/Nov'26 and Oct/Apr'27 Brent futures spreads stand at $1.75/bbl and $11.09/bbl, respectively.

This afternoon was very quiet in Brent/Dubai, with some trade buying of Sep Brent/Dubai and fund selling of Nov and Dec Brent/Dubai. This meant we continued to trade in a tight range, with Sep Brent/Dubai trading between $4/bbl and $4.15/bbl. There was refiner buying of the Balmo Aug/Sep spread around $9/bbl, and buying of Bal-Aug Brent/Dubai between -$2.20/bbl and -$3/bbl. The Brent/Dubai boxes were relatively quiet, trading in a tight range. The Sep/Oct box traded between -$1.35/bbl and -$1.25/bbl. There was product selling of Q4 Brent/Dubai around $3.20/bbl. Some more selling of Dubai spreads came into the market; Oct/Dec offered by majors.

This afternoon in Dated Brent, we continued to see weakness in the front of the curve with selling of 24-28 Aug DBL and 24-28 vs Oct ICE Brent pre-window. However, we did see a size buyer of 1-7 Sep vs Cal Sep trading at $0.45/bbl. In the physical window, we continued to see cargo offers with Forties and Midland getting offered down, pushing down the implied diff. In the paper window, we saw a major selling 24-28 Aug CFD down to $0.0/bbl but buying 14-18 Sep CFD up to $2.8/bbl. 1-4 Sep CFD also traded at $2.75/bbl. Post window, we saw some Sep/Oct Dated buying and buy-side interest in 3-9 Sep vs Cal Sep bid at $0.37/bbl. Also saw a size seller of Mar/Apr Dated and Apr/May Dated.

In VLSFO, the Sep/Oct Sing 0.5% was less liquid, trading between $34.00/mt and $34.25/mt. Sep Sing 0.5% crack traded slightly higher from this morning's close, getting up to $18.00/bbl at the start of the window; however, similar to this morning, it then sold off during and after the window, getting down to $17.65/bbl. Sep/Oct Euro 0.5 traded up $1.50 to $25.00/mt pre-window; it then sold off to $24.50/mt during the window. Sep Euro crack was range-bound, trading around $5.25/bbl. Sep 0.5 E/W traded around $80.00/mt.

In HSFO, it was a choppy afternoon for Sep/Oct 380, which traded down from $38.00/mt to $36.75/mt before encountering some real buying back up to $38.25/mt during the window. Sep 380 crack sold off this afternoon, trading down to -$0.45/bbl by the end of the window. 3.5 Barges were heavily offered this afternoon; Sep/Oct consistently sold off from $15.50/mt to $13.00/mt at window close; it then shed another dollar down to $12.00/mt post window. Sep Barge crack was also heavily offered and sold down from -$10.70/bbl at window close to -$11.25/bbl. Sep 380 E/W was therefore implied much higher, currently at $68.25/mt.

This afternoon in distillates, Sing gasoil spreads were sell-side in the front, with Sep/Oct selling down to $5.90/bbl, while Oct saw selling at $6.20/bbl. The front gasoil E/W remained range-bound, Sep trading from -$67/mt up to -$68.75/mt before trading back to -$70/mt post-window. Regrade was scale back bid, trading down to -$4.65/bbl in Sep, while kero spreads remained offered, with Mar/Jun at $8.00/bbl.

Prompt ICE gasoil spreads weakened, Sep/Dec trading from $155.00/mt down to $146.50/mt, while cracks firmed in Oct from $73.00/bbl up to $75.00/bbl. European jet diffs weakened slightly in the front, with Sep trading from $54/mt down to $53/mt, while Q4 was steady at $98/mt. Both heating oil spreads and HOGOs weakened, with the Sep HOGO swap trading from 31.00c/gal down to 30.20c/gal.

This afternoon, gasoline was well supported. RBBRs rallied before softening during the window, with arbs trading up to highs of 3.40c/gal before weakening to 2.05c/gal at the end of the window. Sep EBOB cracks went bid by a major, trading up to $33.60/bbl, but Q1 was well offered at 16.20/bbl. Spreads were strong, with Sep/Oct firming from $97.50/mt to $100.50/mt. The gasoline E/W was a touch weaker and had scaleback buying in Sep down from -$15/bbl to -$15.20/bbl, with 92 cracks valued at $18.40/bbl.

This afternoon in naphtha, MOC was quiet after the morning’s better-bid tone. NWE naphtha stayed under pressure through the day, with Sep cracks moving from -$4.80/bbl this morning to around -$5.10/bbl before recovering slightly, but still ending softer near -$5/bbl post-window; spreads-wise, Sep/Oct traded around $25.50/mt and Dec/Jan around $12/mt, while Sep/Nov finished near $50.50/mt. E/W held supported in the front, with Sep holding around $41/mt, while Cal 27 was traded at $26.50/mt. MOPJ was quiet and illiquid, with Q4 cracks around -$1.15/bbl and Cal 27 near -$5/bbl, while Sep/Oct softened from $28/mt this morning to around $25.25/mt and Dec/Mar traded around $48.50/mt.

A quiet afternoon in NGLs today. Sep/Oct FEI traded range-bound at $26/mt and $26.5/mt, with Dec/Dec getting sold at $110/mt, before strengthening $0.50/mt by the end of the afternoon. There was also good buying of Dec 26/ Feb 27 FEI at $63/mt. As FEI was stronger on crude, Sep LST/FEI traded down to -$337/mt, where it eventually closed the afternoon. Q4 LST/FEI trading at -$288/mt, and the Cal 27 arb was lifted at -$190/mt, before softening to -$192/mt into close. LST spreads had mixed interest in the deferred, with Q1/2 27 trading at 4.5c/gal across the afternoon. In the front, there was some good selling of Sep/Nov LST at -0.5c/gal by US trade. Another very illiquid afternoon for Butane, but there was buying of Oct/Nov C4 ENT at 0.5c/gal, the same level as close of yesterday.