Brent set for weekly gains on concerns over US-Iran talks

The US stated that it could maintain a naval blockade on Iran indefinitely, with Defense ‌Secretary Pete Hegseth saying that the US can "rotate ships in and out, as we have." Treasury Secretary Scott Bessent also said the US was planning further financial measures against Iran. The UAE reported that two ADNOC vessels have been hit in the Strait of Hormuz,  an incident the ​UAE government has condemned ⁠as an Iranian attack. India's shipments of Russian crude made up 50.83% of its imports at 2.47mb/d - up 62.4% y/y but 4.8% down m/m from June's record 2.6mb/d, according to Reuters. In other news, Novatek's gas condensate processing complex at Ust-Luga was damaged in a drone attack on 14 August. Oil export operations at the terminal are unaffected. Sales of marine fuel in Singapore rose for a third consecutive month in July amid robust demand, according to official data. Finally, at the time of writing, the Oct/Nov'26 and Oct/Apr'27 Brent futures spreads stand at $1.96/bbl and $8.84/bbl, respectively.

Quiet morning in Dated Brent. We saw some buy-side interest in Bal-Aug'26 vs the 1-7 Sep'26 and the 7-11 Sep'26 CFD, which was bid up to $2.95/bbl. We also saw buying of Sep/Oct'26 DTD and Oct/Nov'26 DTD lifted at $1.98/bbl and bid over in good size. Further down the curve, we saw two-way interest on Q127 DFL with funds selling and a major and a bank on the buy side, trading in size. We also saw selling of Q2'27 vs Q2'28 DFL in size.

This morning in Brent/Dubai, we initially opened lower, opening $0.3c lower at $5.00/bbl. We traded higher into the window, up to $5.35/bbl, but post-window we saw trade buying of Sep/Nov'26 spread and selling of Q4'26 Brent/Dubai around $5.60/bbl. We traded range-bound in the Sep'26 Brent/Dubai, between $5.18/bbl and $5.25/bbl. There was also large buying of Dec'26 EFS, which traded $8.45/bbl. With the large buying of Sep/Nov'26 Dubai spread, we traded lower in the Sep/Nov'26 Brent/Dubai box,  down from -$0.20/bbl to -$0.60/bbl. There was also trade buying of Bal Aug/Sep'26 Dubai spread around $5.50/bbl, with the window pricing closer to $8.00/bbl.

In HSFO, it was a stronger morning for 380. Sep'26 380 crack traded up to  -$1.60/bbl during the window, considerably higher than the close of -$2.10/bbl last night; the buying continued post-window, and it is currently trading at -$1.35/bbl. Sep/Oct'26 Sing was also bid trading up to $34.00/mt. There was less activity in 3.5% barges this morning; Sep'26 crack was range-bound, trading around -$9.70/bbl during the window, and Sep/Oct'26 traded at $15.00/mt

VLSFO opened considerably higher this morning on bullish market sentiment; Sep'26 Sing crack traded at $19.70/bbl this morning, up from last night's close of $18.70/bbl; it then traded up as high as $19.95 during the window and has since sold down to $19.65/bbl. Spreads were much better bid this morning with Sep/Oct'26 Sing trading up from $37.25/mt pre-window to a peak of $40.00/mt during the window before selling back down and settling around $39.25/mt post-window. Sep'26 Euro crack also opened higher this morning; it traded up to $7.70/bbl pre-window and then consistently sold off, bottoming out at $7.15/bbl post-window. Sep/Oct'26 Euro traded down from $24.75/mt to $24.00/mt during the window. Sing 0.5 E/W was implied higher up from $76.25 early this morning to $79.00/mt at window close.

This morning in distillates, Sing gasoil spreads were mixed overall, with Sep/Oct'26 range-bound between $6.35/bbl and $6.50/bbl. Front E/W sold off initially, hit down to -$70.00/mt, before turning bid into the end window and trading up at -$68.00/mt last. Regrade continued sell side in the front, with Sep'26 trading down to lows of -$2.60/bbl on kero spread selling before trading back up to -$2.35/bbl.

Prompt ICE gasoil spreads were range-bound, with Sep/Dec'26 between $160.00/mt and $167.50/mt, at $163.00/mt last, while cracks weakened to $71.30/bbl in Oct'26.

This morning in gasoline, Singapore 92 MOC was better bid. The East was a touch stronger, with cracks trading up from $19.50/bbl to $19.70/bbl, and there was scale-back selling on spreads, with Sep/Oct'26 trading at $5.10/bbl. Sep'26 E/W firmed from -$11.80/bbl to -$11.60/bbl, with EBOB seeing better selling. Cracks were offered down from $31.70/bbl to $31.45/bbl in Sep'26, and Sep/Dec'26 was sold down from trade houses from $182.00/mt to $180.00/mt.

A stronger morning in Naphtha today, with MOPJ MOC better bid and both MOPJ and NWE spreads leading the move before coming off slightly towards the end of the window. MOPJ cracks opened supported, with Sep'26 moving from around -$1.00/bbl to -$0.25/bbl before easing back to -$0.50/bbl, while Sep/Oct'26 rallied from around $20.50/mt to $22.00/mt and Oct/Nov'26 came off from highs at $22.75/mt to $21.50/mt. Prompt E/W was stronger too, with Sep'26 moving from $36.00/mt to $37.25/mt, and the Sep/Oct'26 box moved down from around -$0.50/mt to -$1.50/mt. NWE naphtha followed the bid tone, with Sep'26 cracks opening around 30c stronger at -$4.90/bbl and trading up to -$4.35/bbl before softening to -$4.60/bbl, while Sep/Oct'26 opened firmer at $23.50/mt versus $20.25/mt last night and Sep/Dec'26 moved up to $62.00/mt from $54.25/mt.

Another quiet morning in NGLs today. Initially saw some deferred FEI flat price buying by Chinese out of Apr'27 27 and May'27 27 at $558.00/mt and $542.00/mt, respectively. Sep/Oct'26 FEI was trading at $23.00/mt into the window, the same level as last night’s close, and Nov/Dec'26 was getting lifted at $11.00/mt. There was also some deferred FEI spread interest, with Sep/Oct'26 27 getting bought at -$5.50/mt. Sep'26 FEI/MOPJ traded at -$78.00/mt before closing the morning at -$77.00/mt, and the Sep'26 pronap was sold at -$207.00/mt, down $7 from yesterday’s closing level. Post window Sep'26 LST/FEI traded up from -$310.00/mt to -$307.00/mt. End window on screen, Sep'26 FEI flat price was lifted at $681.50/mt.

S&P makes new all-time highs while the U.S. sells 30-year bonds at 5.216%, the highest borrowing costs since 2001.

The US Government officially posts its largest July budget deficit in history, at -$432 billion, due to an acceleration in federal spending. Interest on US debt rose +$26 billion from last July's levels to an alarming $118 billion for the month. This puts total interest expense for FY 2026 up to $1.17 trillion in FY 2026. As a result, interest expense has officially surpassed both National Defence and Medicare spending…. The U.S. cannot afford higher rates.

Today, South Korea's 30-year bond yield hit 4.73%, its highest level ever.
U.S. PPI came in lower than expectations 0.0% MoM (est 0.2%), 4.7% YoY (est 4.9%).

SanDisk ($SNDK) laid out investor day targets: mid-to-high teens revenue growth, roughly 80% non-GAAP gross margins, about 50% adjusted free cash flow margins, and 100% of excess cash returned to shareholders. The standout was HBF technology, with internal testing showing 1 HBF GPU matching the output of 8 HBM GPUs (8x CapEx efficiency), and 4 HBF GPUs matching 8 HBM GPUs on token output (2x GPU efficiency). Shares rose 14% on the news.

Hedge funds bought +$6.8 billion in US equities last week, the largest weekly purchase in 18 years. As a % of the S&P 500’s market cap, this was the 9th-largest weekly purchase since 2008.