Brent spreads slip into contango as tankers flow via the Strait of Hormuz

This marks the first time the futures spread has fallen below zero since February 2026, and signals that the market is pricing in a normalisation of flows via the Strait of Hormuz alongside the scenario of added supply from Iran. Three stranded tankers carrying 5mb of crude oil exited the Strait of Hormuz on 24 Jun, with two headed to Asia, as per ship tracking data viewed by Reuters. In the US, the EIA reported a 6.1mb decline in domestic crude oil inventories alongside a 2.1mb and 3.1mb build in gasoline and distillate stocks in the week ending 19 Jun. However, total US crude stocks, including commercial and SPR inventories, dropped by 15.1mb last week to 74.3mb, their lowest since 1984. In Europe, TotalEnergies has cut runs at its oil refinery in Normandy (240kb/d) by an estimated 10-15% due to hot weather. Exxon is also planning to take its Antwerp (318kb/d) offline ahead of a workers' strike beginning on 29 Jun. Moscow's oil refinery is expected to be offline for at least six months after suffering extensive damage in Ukrainian drone attacks, as per Reuters. The refinery is the largest fuel supplier to the Moscow region. However, Russia is set to ship 2.7mb/d of crude oil from the Baltic ports of Primorsk and Ust-Luga and ​the Black Sea port of Novorossiysk in June (May: 2.5mb/d), as per Reuters, as refinery outages following drone attacks push barrels onto export markets. Finally, at the time of writing, the Aug/Sep and Aug/Feb'26 Brent futures spreads stand at -$0.06/bbl and $1.60/bbl, respectively.

This afternoon in Brent/Dubai was very quiet, with Jul Brent/Dubai trading rangebound between $7.35/bbl to $7.6/bbl. There was continued Chinese selling of Oct ICE vs Aug Dub and Sep ICE vs Jul Dub. Towards the lows there was some trade buying of Jul Brent/Dubai. The Q4 continued to be bid at $3.15/bbl. The Dubai spreads traded rangebound, the Jul/Aug trading between -$1.15/bbl to -$1.05/bbl. The boxes were also directionless, with no real interest OTC.

E/W continued to be the story on VLSFO. The E/W was offered both on legs and outright. The Sing crack remained rangebound around $13.80/bbl, however the Euro 0.5% crack traded up to $8.50/bbl from $8.00/bbl. E/W boxes also came under pressure, Jul/Aug Sing 0.5% traded down to $19.25/mt while Jul/Aug Euro 0.5% traded up to $28.00/mt.

A weak afternoon in European HSFO, with front 3.5% barge cracks selling down on thin liquidity from -$8.40/bbl to -$9/bbl by end of window. European structure weakened as a result with Jul/Aug'26 trading down to -50c/mt. Chinese initially sold flat price and then flipped buyer adding support to the front E/W implied at $8.75/mt by end of window.

This afternoon in distillates, Sing gasoil was thin down the back of the curve with Jul/Aug trading up to $2.15/bbl in line with the ICE gasoil move. Similarly, the gasoil E/W sold off from -$39/mt to -$43/mt in Jul. Regrade traded rangebound from the morning with buy-side interest on the Jul combos at -$42/mt, -$0.85/bbl. Kero spreads remained scale back offered with strength in Europe, trading up to $1.30/bbl.

Prompt ICE gasoil kept rallying through the afternoon, reaching $21/mt in Jul/Aug. Aug cracks saw similar flow, rising to $42.95/bbl with weakness in crude. European jet diffs trading slightly lower than the morning at $57.50/mt. Heating oil came off with weakness off stats then aggressively rebounded, trading up to 31.90c/gal on the M1 HOGO swap.

This afternoon in gasoline, EBOB flat price traded end window at $859/mt with MOC balanced. RBBRs were stronger and arbs saw mixed interest as they came off from 32.50c/gal to 31.70c/gal. EBOB cracks were mixed as well, trading at $29.55/bbl end window. Front spreads also rallied on higher RBBRs, trading up to $31.25/t before softening to $27.50/mt post stats. The gasoline E/W initially sold off as EBOB rallied, trading down to -$10.70/bbl but recovered to -$9.90/bbl with good 92/Dubai crack buying around $26.65/bbl.

This afternoon in Naphtha, mixed interest in NWE MOC with July Nap flat price valued at $604.5/mt at the end of the window, equivalent -$5.75/bbl on a crack level, down from today’s highs of -$5.40/bbl. Cal'26 cracks found some buying before the window, seeing -$8.90, -$8.85 and -$8.80/bbl getting lifted with the Cal E/W valued at $23/mt. Sell-side interest in Aug naphtha E/W down to $32.75/mt with selling in July/Aug MOPJ flat price spread. Sell-side interest in Aug crack this afternoon at -$7/bbl from a fund.

This afternoon in NGLs, prompt spreads in both FEI and CP came off as flat prices softened. Jul/Aug CP traded down to $74/mt, having traded at $86/mt during the morning window. Jul/Aug FEI was down $1.50/mt from morning trading level at $4.50/mt. Jul FEI/CP found some support at -$28/mt, $1 stronger than where it settled post Sing. LST/FEI trading in Jun and Q3 at -$180/mt and -$178.5/mt, and the Aug/Sep roll was hit at flat. Had selling of the Q1 FEI/MOPJ at -$60/mt, $2 stronger than yesterday’s close. LST spreads were mixed today with interest in both the prompt and deferred. Q426/Q127 was lifted at 0.25c/gal and Jul/Aug at -0.25c/gal where it settled post window. In butane, it was a relatively quiet afternoon with some spread selling in Jul/Sep and Sep/Oct, trading at -0.50c/gal and -1.125c/gal respectively. There was also a C4 ENT/C3 LST buyer out of Q3 at 17.25c/gal.