The Officials

Controversy in the Murban assessment is brewing again! No rest for the wicked! Platts has proposed a new methodology for a ‘quality adjustment’ rather than just a ‘quality premium’. In practice, this means Murban could be discounted through a negative QP: the seller would then have to reimburse the buyer the value of the adjustment if a Murban cargo is declared into the window. But the adjustment is asymmetric. When Murban prices above Oman, the adjustment will equal 50% of the average spread over the previous five days, only when the spread is greater than $1. When Murban prices below Oman, the adjustment will equal 100%, with no minimum spread. As one trader said, Platts have made it harder for Murban to be assessed expensive.

Markets are bullish again! The OPEC fakery on increasing volumes is suddenly becoming clear and everyone is waking up from their data slumber. We The Officials tell you, do not trust most government data as it is all massaged. OPEC data falls in this category, highly erroneous and one could claim that it is on purpose. But web of lies have a way of catching you. And yeah, we told we were bullish, didn’t we?

What a hectic weekend: an outsized OPEC fake quota boost, massive Saudi OSPs increases and an all-you-can-eat buffet of TACOs on Sunday! OPEC wants to rip off the plaster and get out from under the reports of – hey, if there are no quotas, there are no concerns about compliance! 4D chess! So, OPEC goes up on paper, but the real increases are marginal while demand booms, so…prices go up!

It’s mayhem time… Based on numerous calls and communication with Prax, the refinery and the government it is quite clear nobody knows what’s happening. An employee told us they are unsure if they will have a job in a week’s time. Others have already taken to LinkedIn try to get a new job.
Not to worry, as Mr Miliband stepped into the breach and reassured us that the government is “ensuring continued safe operations at the site”. Note that they told us “stock levels are normal across the UK”, dodging the question of whether Lindsey itself has enough supply to last more than a few weeks. They also declined to comment when asked repeatedly where the money’s coming from! There certainly isn’t an abundance of the stuff…

9 July is the deadline, right? Oh, maybe it’s 1 August or 1 September instead… Trump is apparently planning to impose tariffs according to the new trade deals with those he whacked with his reciprocal tariffs. While the Americans are busy launching fireworks and Trump sharpens his pencil to sign the Big Beautiful Bill at 5pm, they don’t want to think about the looming tariff fight. But the market reaction was depressing on the Trump tariff news, as he crystallised the upcoming trade disruption he’s ready to unleash again, as oil just slid briefly below $68. The equity market struggled more, with S&P 500 futures dropping over 0.5% today, while gold rose as its safe haven status is reignited.

Brent structure off on a flyer today, with the prompt spread briefly exceeding $1.30! It fell back by the close at $1.20. By contrast, flat price remained relatively contained. It launched an assault on the $69 mark in the late morning and held that into the afternoon, though slipped to $68.49/bbl by the close.
Mercuria was back in the North Sea window, dangling another Midland offer in there. But they offered a 26-30 July Midland at $2.10 over Dated early in the window and then left it to rest there, though it attracted no interest at all. And finally we saw a bid for Forties! After Totsa cleared out Shell’s Forties offer a couple of days ago, Unipec came in today to bid Forties at Dated +$1.30 – massive! It was also a very wide bid, for 13-31 July… And the physical differential jumped to 64c!

The Officials have asked senior personnel at IFAD (ICE is the majority shareholder and operator of the exchange) some questions regarding operations at the exchange and its delivery mechanism for Murban. Murban crude oil is the flagship powering the IFAD exchange and feeds the deliveries on the physical exchange. Based on agreements between ADNOC, its term lifters and equity producers they will use the monthly average price for Murban as formed on the IFAD exchange to set the Official Selling Price for Murban barrels loading two months forward.

The dust is settling from the Prax collapse. Lindsey Refinery is the epicentre, where the radioactive fallout is most intense. But it’s spreading across the entire country’s infrastructure, as Lindsey supplies numerous key transport hubs, including Heathrow Airport. Repeated calls to suppliers and operators including Heathrow Hydrant elicited refusals to comment and lack of clarity as to what, if anything, the Airport is doing to prevent supply disruption. Stories of fat cats gorging on gluttonous bonuses while the business collapsed made it into mainstream media, fuelling public outrage. Net Zero Brains was quick to stick his oar in, demanding an investigation into directors’ conduct and the “circumstances surrounding this insolvency” – maybe he should also look at his suffocating policies…And remember a company is not run as a social service but to generate profit and yes, returns to its owners. So, if anybody is outraged and thinks the business is too good, buy it and run it! The government is also asking Prax creditors to register to come and feast on the carcass. The vultures are circling to get their just desserts!

Brent flipped bullish today, breaking out of its recent comfy range. This morning, Brent closed at $67.26 but after the close it leapt up, rallying about 80c on its way to $68. According to traders “the mood became increasingly bullish throughout the morning”, Dated was bid, with the prompt dfl implied up to $1.80/bbl. While the geopolitical fluff and war premium have been cast off, we are now back looking at supply and demand balances and complicated models – plus of course the usual speculation about OPEC shenanigans! But we recognize this is very hard because no one seems to have good fundamental data. In a recent interview we said, ‘throw it all in the bin,’ and start over. We are a little bullish, what can we say.

Trump loves a good electric vehicle. Except for one flaw… “it explodes”. Or burns or something if made by your EX-BFF. You could say that Elon and Donald have an explosive relationship! Trump said Musk “lost a lot more than” just the EV mandate. The gaping hole in Elon’s heart has been filled by bitterness. Hmm, the sparks. And Musk is launching a vendetta against any Congress members who campaigned to reduce spending and voted in favour of the Big Beautiful Bill. It won’t end well. If he has anything to do with it, they will lose their next election! But if Trump gets his way, Musk might get deported before he can launch any further political stratagem. The law to easily remove nationalized citizens is already in the books.

Amidst de-escalating tensions in the Middle East, which saw crude and product prices declining more than 10%; in the week ending 27 June 2025, exchange traded futures volumes in Brent front month declined w/w as it was approaching expiry, with August contract volumes falling 37.58%. Gasoil and Heating Oil exchange traded volumes contracts declined across the board w/w. By contrast, WTI futures volumes marginally increased across the three tenors w/w.

Rolling out of bed and down the hill for flat price. As August Brent expired, the September contract came to the fore and slid to under $67 this morning. The prompt (Sep/Oct) Brent spread closed the first Asian session of July at 94c.
If you were used to June’s Dubai window, forget what you knew… Today we saw a staggering 68 partials traded and PetroChina is back – back on the sellside big time! And guess who’s back on the buyside? Yep, it’s the Vitol and PC show again – they’ve already hit two convergences in this first window, with PC nominating two Upper Zakum cargoes! PC sold 59 partials today, Glencore sold 7, while Reliance and Hengli one apiece. Vitol was buyside for 59 trades (though not all with PC), while Exxon picked up 6 and Gunvor bagged the other 3. A white-knuckled window after the somnambulance of June saw the Dubai physical premium jump 28c to $2.95 – though it’s still lower than its peak of $3.40 on 23 June.

June and Q2 ended literally in fireworks if not bombs. What a month it has been. It’s been chaotic: traders had complained last year about lacking volatility, but they’ve certainly got their fix over these last 6 months! From $80+ to sub-$60 and back up and down again. Wide grins to wonky smiles in the Brent futures structure… We entered June under the misplaced expectation of calm, as the market seemed to have finally sussed out that OPEC numbers are nonsensical and waited to see what comes of the end of Trump’s tariff truce.

Another frenetic month draws to a close and here we are again on the Monthly Editorial page. June started quietly but built to a monumental crescendo as Israel and Iran inspired massive market moves. Brent hit a high of $81.40/bbl on Monday 23 June as the Israeli Iranian orchestra reached its crescendo of missiles and bombs. But a flimsy de-escalatory retaliation by Iran on the US base in Qatar inspired a huge $10 dump last Monday. We like good choreography, especially when it allows for a pretty fireworks display and a calming of the situation. The American forces knew how many missiles would be coming their way, thank you Iran, and were prepared with about four times as many Thaad counter missiles. Why waste all of this?

Everyone just wanted a calm lead-up to the weekend after the carnage of the last week. Brent oscillated gently in a 50c range throughout the European session, reaching the close at $68.31/bbl. Expiry is looming on Monday and the prompt spread remains beefy at $1.11. The Aug WTI/Brent spread has closed in significantly in recent sessions, from around -$2.80 on Wednesday morning to -$2.38 by today’s close.
The headline that OPEC+ is considering another fake output hike in its early July meeting sent Brent down again, all the way to $67.45/bbl. Our question has to be: why does the market still care what OPEC decides? They’re doing whatever they like anyway! And have been for months! Furthermore, early analysis by The Officials suggests even Saudi Arabia is at or approaching its commercial maximum output. They’re all maxed out!