Brent Softens as Russia’s Omsk Refinery Struck

In the news, Ukraine has carried out a drone strike on Russia’s Omsk (460kb/d) refinery, the country’s largest, located deep in Siberia, marking one of Kyiv’s longest-range attacks since the Russo-Ukrainian war began. Russian authorities confirmed the strike, stating there were no casualties, though the extent of the damage remains unclear. Elsewhere, Indian state refiners IOC and HPCL have jointly purchased around 8mb of crude through tenders last week, according to Reuters sources. IOC secured 1mb of Angola’s Kissanje crude from Cathay Petroleum, 2mb of Nigeria’s Agbami and Usan grades from Trafigura, and a further 2mb of Angola’s Nemba and Dalia crude from Chevron, with deliveries scheduled for late August to early September. Separately, HPCL bought 2mb of Brazil’s Tupi crude and 1mb of Kazakhstan’s CPC blend for August and September delivery. In Iraq, the cabinet has approved Basra Oil Company signing a heads of agreement and a non-disclosure agreement with a consortium including Capital TI, Chevron, and Qatar’s UCC to assess strategic oil export pipeline projects. The consortium will carry out technical and financial feasibility studies on several proposed routes, including Basra–Haditha–Kirkuk–Ceyhan and Basra–Haditha–Baniyas. The agreements do not create any binding financial or contractual commitments. Separately, Basra Oil Company has also been authorised to sign a consultancy services contract with KBR for the Basra–Haditha pipeline project. Finally, as of the time of writing, the front-month (Sep/Oct) and 6-month (Sep/Mar’27) Brent futures spreads are at -$0.21/bbl and $0.25/bbl, respectively.

This afternoon in Brent/Dubai we continued to trade rangebound to slightly lower, the Aug Brent/Dubai trading between $4.90/bbl to $5.15/bbl. There was some products buying of Q4'26 Brent/Dubai and Oct Brent/Dubai. The Dubai spreads continued to trade rangebound, the Aug/Sep Dubai spread trading between -$1.30/bbl to -$1.20/bbl, fund selling. We saw more selling of Jul/Aug Balmo Dub spread by tradehouse, some refiner buying of Cal Jul/Aug Dub spread. There was a trade seller of Oct/Dec Brent/Dubai box, nothing ended up trading.

Quiet afternoon in Dated with the main action in the window again. We saw a refiner offering a Forties cargo, pushing down the implied diff. This was then lifted by a major who then sold CFDs in the window. We also saw another major offering 2 Brent cargos. In the paper window, we saw selling of CFDs again with majors and trades selling 13-17 Jul CFD, 20-24 Jul CFD and 27-31 Jul CFD. Post window we saw a trade and major bidding 13-17 and 20-24 Jul vs Cal Aug rolls, as well as refiners buying Balmo Jul/Aug.

A quiet afternoon to end the first day of the week on VLSFO. After the 0.5 E/W was initially weaker this morning we saw some strength come back into the market with some buying on Sep/Aug cross-arb out of the US. Consequently, we saw some strength on Sing 0.5 with the front crack reaching as high as $12.20/bbl. However, it did relax somewhat as the day drew to a close ending around $12.00/bbl. The Euro crack came under pressure due to 0.5 E/W strength, with Aug ending the day at $4.00/bbl. Liquidity on Sing spreads dried up as the day went on which saw Aug/Sep trade down to $11.25/mt from $11.75/mt. It was a similar story on Euro spreads with Aug/Sep implied down to $9.50/mt from $10.25/mt.

In HSFO, 380 E/W continued to be offered this afternoon. Chinese arbers were not present in the market today, which meant liquidity was low on 380. 380 cracks continued to drift off due to 380 E/W weakness with Aug trading down to -$7.10/bbl from -$6.80/bbl. 380 spreads suffered a similar fate, with Aug/Sep 380 continuing to drift off throughout the afternoon trading down to $0.50/mt from $1.00/mt. Barge cracks continued to be rangebound around -$9.20/bbl for the afternoon. Aug/Sep barges followed a similar trend trading between $1.50/mt and $1.75/mt.

This afternoon in distillates, Sing gasoil spreads moved slightly lower in the front, with Aug/Sep trading from $2.90/bbl down to $2.75/bbl. E/W saw bank selling across the curve, with Aug hit $10 lower from -$55/mt down to -$65/mt, while Q4 traded $3 lower from -$44/mt down to -$47/mt. Regrade was bid in the front, with Aug at -$1.80/bbl, but was sold into by market makers against kero spread selling.

ICE gasoil spreads rallied across the curve, with Sep/Dec trading from $85/mt up to $91.75/mt, while prompt cracks ripped to $50.50/mt post window. European jet diffs weakened overall, with Aug down $3 from $64/mt to $61/mt. Heating oil spreads were higher, while HOGOs rallied initially before selling off into the end window.

This afternoon in gasoline, EBOB flat price traded end window at $881.50/mt with MOC well bid. RBBRs were strong post US open, pushing Aug arbs up to 31c/gal. EBOB cracks were well bid by refiners, rallying from $31.70/bbl to highs of $33.35/bbl, and Q4 was trading at $14.10/bbl. Spreads got lifted as well with Aug/Sep trading up from $50/mt to $55/mt. E/W came off aggressively in Aug, from -$12.50/bbl to -$13.60/bbl, as 92 cracks remained rangebound between $19.40/bbl and $19.70/bbl.

This afternoon in naphtha, mixed interest in NWE MOC with Aug Nap crack trading -$2.95/bbl end of window. Some buyside interest in Dec cracks from a fund, seeing buying step up to -$6.35/bbl, with Cal'27 trading up from -$8.20/bbl to -$8.10/bbl. Spreads touch better offered this afternoon, with sell side interest in the Q1/Q2'27 crack roll at $1.30/bbl and $1.25/bbl, with prompt Aug/Sep naphtha spread trading $15/mt end of window. E/W valued $39.50/mt end of window, bid on.

This afternoon in NGLs, FEI spreads traded down again with Aug/Sep getting sold at $7/mt, from $9/mt earlier, and Sep/Oct at $1/mt. There was also some Oct/Nov FEI buying at $1/mt, down $1 from last week’s closing level. Buyside interest in LST/FEI this afternoon, with Sep lifted at -$203.50/mt, and the Cal arb trading at -$162/mt, the same as during the Singapore window. There was an Aug ENT/FEI buyer at -$223/mt and -$220/mt, and we also saw 2H'27 LST/FEI trade at -$158.50/mt. LST spreads opened with better buy side interest, seeing Aug/Sep lifted at -0.375c/gal. In the deferred, Q4'26 /Q2'27 was lifted at 5.5c/gal, before softening to 5.25c/gal by end window. Cal'27 LST was trading 67.25c/gal, up 0.625c/gal from last week. In butane C4 ENT also had good buying with Aug/Sep at flat, and Oct/Nov also lifted at the same level. Had C4/C3 buying in Q4 at 19.25c/gal, where it eventually settled end window, and the same level was trading in Aug.