Brent Strengthens Amid New Houthi Attacks

In the news, the Houthis have said that they had launched missile and drone attacks on Saudi deployments in Yemen's Marib and Hadramout provinces, claiming to have inflicted heavy casualties and destroyed military camps, weapons depots and vehicles. The nation has also claimed an understanding with Oman on the geographic coordinates of a new shipping corridor through the Strait of Hormuz. According to Iran's Foreign Ministry, a joint announcement is now being finalised, provided there is no interference from third parties. Elsewhere, China's state-owned Sinopec has ramped up purchases of Russia's ESPO crude to offset reduced Middle Eastern supply following the US-Iran war, according to Reuters sources. The cheaper Russian barrels have helped Sinopec maintain refinery runs and capture strong fuel export margins. Sources estimate the refiner has purchased 30-40 ESPO cargoes for Jul-Sep delivery, equivalent to around 5-6% of its 5.2mb/d refining capacity. In Russia, crude and condensate output rose slightly in July, increasing by around 100kb/d m/m to above 9mb/d, supported by stronger exports and a recovery in refinery runs, according to Reuters sources. Despite sanctions and repeated refinery attacks, Moscow continues to maximise oil revenues by maintaining elevated supply. Output is unlikely to hold at July levels in August. OPEC data showed Russian production fell to 8.928mb/d in June from 8.989mb/d in May. In other news, India’s fuel consumption rose 3% m/m in July to 19.92Mmt, the highest level since March, according to Petroleum Planning and Analysis Cell data. Demand was also up around 3% y/y, with LPG consumption increasing 7.5% m/m to 2.35Mmt, although still down 16% y/y. Finally, as of the time of writing, the front-month (Oct/Nov) and 6-month (Oct/Apr’27) Brent futures spreads are at $2.00/bbl and $7.06/bbl, respectively.

This afternoon in HSFO, Sing spreads traded up on higher crude with Sep/Oct'26 closing at $37.50/mt and Oct/Nov'26 trading up to $19.50/mt. The Sing crack was fairly muted despite coming under some pressure from Chinese selling it closed at $19.65/bbl. There was real selling on the Euro crack trading down from $8.10/bbl to $7.50/bbl, before rebounding to $7.85/bbl post-window. Sep'26 0.5 E/W was implied significantly higher on the back of E/W selling closing around $75.75/mt up from $72.00/mt at Sing close. Euro spreads were more stable with Sep/Oct'26 trading around $24.00/mt.

This afternoon in VLSFO, Chinese arbers were buying 380 flat price and cracks, Sep/Oct'26 traded up from $24.00/mt to $25.75/mt. We saw scale back bids on barges and E/W sold down from $42.25/mt to $40.50/mt as a result of physical hedging, Sep'26 380 crack was range-bound trading around -$2.35/bbl. The Euro window was firmer this afternoon with a European tradehouse supporting the physical, European structure rallied on stronger Sep'26 barge crack which traded up 20c to -$7.70/bbl. Sep/Oct'26 traded up to $13.00/mt

This afternoon in distillates, Sing gasoil spreads continued well offered in the front, with Sep/Oct'26 holding at $4.95/bbl on higher IPE. E/W saw selling in Q4'26, trading from -$59.50/mt down to -$60.00/mt. Regrade continued bid in Sep'26, stepping up to -$0.30/bbl last.
Prompt ICE gasoil spreads rallied post window, with Sep/Dec'26 trading from $133.00/mt up to $145.50/mt, while cracks rallied to $63.50/bbl in Oct'26. European jet diffs saw sell side pressure, trading down to $94.00/mt in Q4'26. Heating oil spreads rallied, while HOGOs weakened, with the Sep'26 HOGO swap down to 26.70c/gal.

This afternoon gasoline was strong. RBBRs rallied but arbs came off from 10.90c/gal to 9.70c/gal in Sep'26 as EBOB went better bid. Cracks got bid up from $27.50/bbl to $28.65/bbl, with Q1'27 offered at $13.50/bbl. Spreads were bid, with Sep/Oct'26 firming from $74.00/mt to $78.00/mt and there was a size buyer of Sep/Dec'26 crack roll around $14.70/bbl. E/W weakened from -$11.00/bbl to -$12.50/bbl in Sep'26 as 92/MOPJ’s and $92.00/bbl cracks saw better sellside interest, with Sep'26 trading at $16.20/bbl.

This afternoon in naphtha was firmer overall, with Europe supported through the afternoon while MOPJ was more mixed and liquidity relatively thin. Naphtha cracks recovered from the early afternoon, with Sep'26 moving from around -$4.60/bbl to -$4.00/bbl post-window. Spreads were better bid, with Sep/Oct'26 firming from around $18.50/mt this morning to $20.00/mt post-window, while Oct/Nov'26 traded around $18.00/mt and Dec/Jan'27 around $7.50/mt. MOPJ was less clear, with cracks illiquid and Nov'26 around -$1.95/bbl pre-window, but spreads held supported as Sep/Oct'26 moved up to $20.50/mt and Oct/Nov'26 to $19.75/mt post-window. E/W stayed firm, with Sep'26 holding around $39.00/mt and Oct'26 around $38.50/mt, helped by the stronger Europe bid but capped by a steadier tone in the East.

Another relatively quiet afternoon in NGLs today. FEI spreads had some buying in Oct/Dec'26 at $19.00/mt, and May/Jun'27 27 was trading in large size for $8 with Major on the sellside. Dec/Dec'26 deferred FEI was lifted at $32.00/mt where it had also traded earlier in the afternoon. There was LST/FEI interest in the deferred, with Q4'26 trading at -$238.00/mt and Q1'27 was bought at both -$201.00/mt and -$203.00/mt. Mixed interest in LST spreads this afternoon, seeing Sep/Feb'27 trade at -2.25c/gal, and Q3/Q4'27 lifted at -1.75c/gal. C4/C3 selling in Sep'26 at 29.875c/gal, and Q1'27 was lifted at 23.275c/gal, before strengthening to close the afternoon at 23.75c/gal.