The Officials

$70 is coming! Dubai’s already bang on there! And Murban is way past it, approaching $71.00/bbl already. What a strong market while everybody is talking bear. But not us, The Officials have been bullish against the talking trend. The market’s upward push is inexorable. There’s a whole confluence of factors: saturation of super short positioning (a target for a squeeze), continued bombing in Russia (forget peace, this isn’t happening any time soon), a broad based risk rally as it is better to be long than short. Traders are coming back from their summer holidays and will realise the war still looks ugly. Lots of them were positioned flat and had a ‘neutral’ outlook as market volatility waned, before the recent climb to the upper-60s. Just today, Ukraine claimed to have hit the Ust-Luga port, as it targets Russia’s export facilities – pressure on India? Trump tried to pin down India to have leverage for peace discussions with Russia.

As an indirect victim of the devastation in Sudan, Vitol’s Fujairah refinery looks particularly vulnerable to disruption to supply as they were allegedly cut off from those grades. Dar and Nile grades formed a significant portion of the Fujairah import diet, according to Kpler data. Vitol’s 100 kb/d FRCL refinery outputs lots of low sulphur fuel and LSFO climbed today, as the prompt Sing 180 crack jumped to a high above -$2.90/bbl and the 0.5% barges crack surged to $4.60/bbl! The
prompt gasoil swap crack $23.81/bbl. Despite its exposure and the swirl of rumors over the impact of the alleged cutoff, Vitol did a turtle thing and remained unresponsive to repeated requests for clarification on the impact the lack of the normal diet would have on their Fujairah refinery. We are patiently waiting for a reply but the market reaction tells you all you need to know. LSFO jumped!

Sanctions, sanctions, sanctions… that’s the summary of the US approach these days. The US Department of State added 8 new ships, a port and a storage company to the naughty list – see details on the details page! The incremental impact is small, as the list of sanctioned vessels is pushing 165 since June 2024. We’re not sure what the game is here since a lot of the vessels have alternative insurance and they are lawful conveyances at the load and discharge port. The impact is lost, and it’s just an annoyance, and does not change anything whatsoever. Traders noted the sanctions came after an FT article, allegedly sourced from entities related to Washington. From a journalistic point of view independence is questioned.

Zelenskyy is apparently ready to accept a deal freezing the front line of battle as it is right now, effectively recognising the lost territory is being ceded to Russia, without officially recognising it as such, according to Mikhail Podolyak, one of Mr Z’s advisers. We wonder how much longer he can cling on to his position…

Ever dependable Mr Phillips is clinging on to keep on bidding for Midland in the North Sea. They’ve been hanging out there, bidding consistently for the grade in the past 7 windows, by our counting! That doesn’t mean they haven’t had success, as Trafi and Chevron have both hit Phillips’ bids.

Bull’s paradise! Bear’s lament! Brent futures bound upwards after yesterday evening’s jump to $67, continuing their momentum into this morning’s European session and nearing $67.50 before the window – and breaking through by 11:30! But if you felt you missed out, don’t blame us! We actually told you about it in this week’s issues – check them out here: https://www.flux.live/the-official-reports/. After a lackadaisical period, we’re happy to see some new excitement reinvigorate a somnambulant market! The prompt spread felt some benefit, rising to 57c by the close.

If you thought this morning’s rally was exciting, this afternoon was the real show! Brent initially started flirting with the $65 handle, but after 16:00 London time, it started trending higher, breaking the $67 ceiling after the European close, reaching its peak at $67.05/bbl – the highest value since August 12 – but since then it fell to the upper $66 level. But the big deal this week is WTI! We have been reporting that WTI has been on a constant decline relative to Brent over the past couple of days, but today, the October WTI/Brent spread hit the lowest since March 28, folks! WTI net-long positioning in Nymex has hit the lowest level in 16 years, while on Monday, managed money net position in ICE and CME combined fell to negative territories for the first time! Seems primed for a squeeze to us…

Brent breaks out! Flat price gathered some upward momentum this morning once Europe awoke from its slumber, climbing from the upper-$65 range to $66.42/bbl by the Asian close. It even had a sniff of the $67 handle, briefly looking like it would keep approaching after the window before bedding in around $66.50. We’ve failed to get convincingly above $67 since 7 August, though we’ve also struggled to break below $65 for more than minutes on 13 August. If it looks ready to burst one way, it’s got to be upwards! Beware the bear trap!

The bears were amassing, but we hope they’ve taken the chance of this momentary reprieve to get out of their positions before all hell breaks loose again and the market snaps their claws off. The White House says that Putin agreed to move to the next stage of peace talks. Progress… but slow. The Russian bear isn’t toothless, however, and while the diplomatic and political jostling goes back and forth, the tit for tat continues. After Ukraine’s attacks on Russian infrastructure late last week and the current one, the Russians hit back. They bombed a gas transport facility in Poltava, setting it on fire.

In the week ending 15 August 2025, exchange traded futures volumes declined w/w across all contracts in the first three tenors, with only exception being Gasoil Futures that held steady in the October tenor. For Brent, it was the October contract that experienced the steepest drop (-26.31%), while for WTI it was the December contract that saw the largest decrease w/w, down 26.69%. Across all instruments, December Heating Oil futures had the greatest decline, down 38.90% w/w.

So, Mr Donald has committed to ‘coordinate’ with Europe some security guarantees to Ukraine. I guess that’s the best the lineup of European supplicants for out of the Deal Man. Ukraine judiciously committed to buying $100 billion worth of American weapons with money they don’t have. Theater of the absurd on both sides. I guess when you have had too much war, your brain goes loopy. It reminds us of the Dadaist movement post the horrors of WW2. That movement embraced chance, spontaneity, and irrationality. The thorny territory issue remains but hey, the West tried to bomb the other guy out of his new dominion, and the more they try, the more he grabs. Maybe Trump’s right, calling it a day where the current fighting lines are is not a bad idea. Brent is being stubborn too, hovering in the mid-60s and reaching today’s Asian close at $65.96/bbl. But we’re detecting some interest in China to load more from October onwards as flat price is low.

Zelenskyy is “ready for peace” but isn’t ready to cede territory. So…he is ready for more ding dong or boom boom shall we say. Poor man, he can’t read the room. 4 months after his initial calamitous meeting with Trump in the Oval Office, he’s still not even ready to wear anything but a T-shirt but the White House forced to at least get a suit. Unlike Zelenskyy’s fashion advisor, Brent flat price couldn’t make up its mind and commit to one option or the other, bouncing around in a range from $65.35 to $66.30, finally reaching the close at $66.09/bbl.

A momentous day! A lot to be decided, apparently, but as we know everything is always decided in advance! Delegations will come to Washington to be told. Trump is firmly in control and putting the onus back on Mr Z to be one deciding to give up things to get peace. Ukrainian elections upcoming? He doesn’t stand much chance if they are so he will not even run. Returning Crimea or the Donbas to Ukraine is not part of the deal, and nor is NATO membership – in other news, the sky is grey and cloudy in London…

Baked Alaska or AKA Bombe Alaska, you choose!🤣 It’s not like the market’s baked anything into the Alaska meeting, as prices slid this morning, before recovering somewhat in the afternoon. That ebb and flow tells you nobody really knows which way Caesar Trump’s thumb will point. We will have to wait until markets are closed, as the one-to-one meeting is scheduled to begin at 15:00 ET (20:00 BST), while a ‘working breakfast’ for the delegations is due to start an hour later. Ahead of the meeting, the swaps market remained rather quiet according to trading sources, while a crude trader was saying “dated is super strong at the moment,” continuing, “it’s very hard to get long structure”.

Maybe traders are too busy scouring Truth Social for an indication of how the Trump-Putin summit will go to keep up with their long positions, as Brent began to slide when Europe awoke this morning, nerves a-jangling! By the close it had slid to $66.32/bbl, having opened near $67. The bullishness from last night is gone!
Traders were earlier very bullish with comments about intermonth spreads, ‘roofing.’ The mood is more tempered now, but everyone is hanging on to what Trump and Putin will decide. Mr Z is still busy, droning whatever he can, but it feels like mosquito bites, annoying, but they don’t change the enveloping force of Russia swallowing up more territory.

Glencore won a tender to deliver US crude to BPCL, while Nayara has managed to keep buying Russian crude, sources told The Officials. Widening discounts on Russian oil must be tempting to Indian refiners, even if they can see the looming American bat swinging over their heads.
Compliant supplier! Up to March this year, Glencore was a company subject to monitorship by the US department of Justice. Sources earlier reported that the DOJ had in situ monitors who could step into any meeting or overhear any conversation to ensure the company stayed within the lines following the accusation of foreign bribery and market manipulation. However, dear President Trump terminated the enforcement of the Foreign Corrupt Practices Act on February 10 with an executive order mandating a 180-day suspension. Dear reader, in case you forgot, all is cool outside of the country and we provide the link to the executive order here.