The Officials

In the week ending 16 May 2025, exchange traded futures volumes in July Brent were almost unchanged, while WTI volumes decreased 1.76% w/w. In more deferred tenors, the weekly changes were more pronounced, with August Brent seeing the largest change, up 8.7%. In the July tenor, RBOB fell slightly more than WTI, while diesel contracts saw significant increases across the board, most notably the August tenor of the gasoil contract.

The buck that flat price dropped after Trump and Putin got on the phone was half regained before long and today’s Asian session saw a market not wanting to commit to a direction in the typically uncertain Trumpist diplomatic scene: he has a deadline. But when is it? Nobody knows… except him.
Over in the structural department, futures time spread structure has strengthened since yesterday’s close of Asia, as the prompt Brent spread increased to 70c at the close today, and the Aug/Sep spread is on a bulking phase at 55c too.

The North Sea bursts into life! Recent sessions had been sleepwalking into a deeply depressed diff, as almost nobody showed any buying interest. Today, however, Glencore barged in with enough bids to fill several VLCCs. They went on the hunt for Midland, throwing bids in like crazy, though not high enough to result in any trades. But then again, there were plenty of other buyers more than happy to lift Midland offers: Litasco lifted Exxon’s 31 May-4 Jun Midland at Dated +$1.05; PetroIneos lifted Aramco’s 9-13 Jun offer at $1.35 over Dated; Trafi lifted Aramco’s 13-17 Jun offer at Dated +$1.50; BP lifted Aramco’s 17-21 Jun at Dated +$1.60! Whew!

The two juggernauts of the global economy are hitting bumpy territory, as the US’ fiscal integrity and debt mountain weigh on
Moody’s credit rating downgrade and China’s economic data fails to live up to expectations. The late-Friday rally that sent Brent
briefly above $65.50 faltered as optimism waned this morning. Before it lost its mojo, the market was really in party mode on
Friday evening! But this morning, the futures structure has cooled from that surge and the Brent front spread slipped from its 65c
high to 60c at the Asian close. However, that famous lopsided smile structure in the curve is still there, and it’s even crept
forward such that the structure slips into contango from the December 2025 contract, despite the prompt strength.

And breathe! The market needed a moment to pause and reassess after all the excitement of OPEC speculation and trade deal carnage. It’s been chaotic run lately, with the flat price rollercoaster entering a calming period after the ‘hold onto your hats’ moments of the past few weeks. Remember to read our Liquidity Report every Tuesday to see how exchange traded volumes vary week by week and year by year! But after all was said and done today, Brent closed at $65.06/bbl, up a healthy 80c/bbl on the day. The futures structure has strengthened somewhat through the 2025 tenors, with the front spread closing at 59c. It went even higher post-window, hitting even 63c! Flat price rose after the window too, going on an adventure towards $65.50 – it looks much healthier than in the first week of May!

PetroChina wrestled back dominance of the Dubai window following yesterday’s chaos, throwing down bid after bid, while also lifting plenty of offers. Mitsui didn’t want to be outdone, putting in a decent shift lifting offers by the likes of Exxon and Phillips, but it just couldn’t keep up with the zeal of the Chinese buyers, who scooped up another two convergences today: both Murbans, declared by Gunvor and Vitol. That brings the PC total for May trading to 8 – now double Mitsui’s count! Trafi also showed up on the buyside, picking off a few offers by Gunvor and Vitol. The Dubai physical premium seems to be treading water these recent sessions: after falling to $1.10 on Wednesday, it’s only ground up to $1.145 as of today.

After a violent morning that sent front month Brent down all the way to $63.55/bbl, Brent felt a sense of reprieve throughout the European session, retracing some losses to close at $64.26/bbl. Everyone gets excited about resolution, especially after last weekend’s trade deal with China. But really progress is often slow, and while we have heard positive noises, we still await the paperwork to back it up, even if concerns about demand destruction by tariffs are massaged. One the supply side, the claims of progress between the US and Iran are playing their part too. No matter how impotent sanctions against Iran have proven in terms of restricting its exports, the prospect of unfettered Iranian supply back on the global market had the longs on the run! The easing of the sanctions would broaden demand and lower transhipment costs.

The percolating US-Iran deal and rising inventories whacked the market…hard! Brent got battered this morning! It dropped like a stone at the Asian open, falling 60c off the bat and continuing to decline to below $64 for the first time since very early on Monday morning. By the close it managed to rebound slightly to $64.06/bbl – down $2.21/bbl and almost 3.5% from the previous close. The Dubai window turned into a bigger bunfight than international diplomacy. PetroChina was getting whacked from all angles by Vitol, Reliance and co, while also lifting plenty of their offers. Trafi showed up on the buyside too, while Mitsui was throwing its weight around as well, lifting Vitol offers like there was no tomorrow. Long gone are the days of a binary window, dominated by one major player on each the sellside and buyside – May has been chaotic to say the least. While Vitol and PetroChina remain two of the most prominent participants, they are finding their influence eroded by this armada of competitors. Just today, Mitsui bagged another convergence with Vitol – its fourth convergence of May so far. They’re hot on PC’s heels, which is on 6!

It’s a tentative start by OPEC, like a runner starting off gently to avoid pulling a hamstring. The secondary sources claimed OPEC+ production of 40.9 mil b/d, coming to a cutback of 106 kb/d – compliance is back in fashion! Naturally, they’re also toeing a bullish line when it comes to demand growth, expecting 1.3 mil b/d oil demand growth in 2025 to be followed up with another 1.3 mil b/d of growth in 2026. There’s a term for this…fakery! Most figures, we are told directly by numerous sources, are managed by some of the OPEC members. So you can’t believe those figures. Just see the numbers as the wishful bullish OPEC narrative and that’s it!

Following the successful agreement of The Officials Brent Index (OBI) with Jakarta Futures Exchange, The Officials are working on partnerships with other exchanges, including with the Stock Exchange of Thailand. We will keep you informed but we think there is a big market for low-cost data and market use. Guess who is your premier low-cost data provider? The Officials! Stay tuned for any new developments!
Brent must have felt dizzy at those lofty heights near $67, as it stalled yesterday evening and fell through today’s Asian session. The Dubai physical premium may be running out of steam too, as it felt the pain for the second consecutive session today, falling a further 31c to $1.10. Who’s surprised, as Totsa popped up on the sellside along with the regulars Vitol and Gunvor – plus of course Reliance, steady as a rock! PetroChina remained a constant presence on the buyside, while Mitsui put in a good shift next to the Chinese, earning a convergence with Gunvor – which nominated a Murban cargo. Mitsui reached a convergence with Vitol too, for yet another Murban. Trafi also showed up on the buyside, picking up a few partials from Vitol and having its bids hit by the likes of North Petroleum. This saw Vitol declare yet another Murban to Trafi…

After dithering throughout the Asian session, Brent found some upward momentum in the late morning and powered on up, climbing from below $65 to burst above $66 to close at $66.18/bbl. Despite this rally, the market felt woozy today, lacking umph as though its mind was on other things, like trying to guess where Trump’s Gulf visit would lead. Brent futures time spreads were treading water through much of the session, coming to the close at 44c. The fun was in the product cracks, as gasoline fell off its perch and diesel fought its way upwards – see more on this on page 2!

In the week ending 9 May 2025, exchange traded futures volumes in both Brent and WTI front month contracts declined w/w. Following the rescheduled OPEC meeting on 3 May, the crude market has cooled somewhat and volumes in Brent and WTI contracts declined across July, August and September tenors. By contrast, volumes in gasoil, heating oil and RBOB July futures increased on the week. In the more deferred September tenor, RBOB was the only contract to see an increase in exchange traded volumes, rising by 7.5% w/w.

The inevitable Donald is dashing about in his new spangled jet, stopping off first in Saudi Arabia on the hunt for some progress on “big business”. Yet with Trump, nothing is as simple as it seems, especially when it comes to tariff policy. After the pomp and circumstance of declaring a 90-day reduction to tariffs on China, the US has quietly kept its “de minimis” tariff in place – meaning the tariff on goods valued less than $800 will face a 54% tariff (or a flat duty of $100 – this is not cheating, is it?), rather than the 30% now applied to other goods. Fortunately for Apple, the iPhone 16 costs rather more than that… Will they regret spending so much on an emergency airdrop of devices from India last month?

‘Nothing to see here,’ say the Saudis as their June allocations to Chinese refiners stick in line with the May allocations, coming to a total of 47.5 mil bbl. But within the headline figure, Unipec will have to tighten its belt as its allocation fell steeply to 10 mil bbl from 14 mil bbl in the previous allocation. Unipec’s been on a bumpy ride though this year’s allocations so far, dropping as low as 3 mil bbl in April before jumping to 14 mil bbl in May! Sinochem, Hengli and Shenghong all got a bump, while Rongsheng remains the biggest recipient, at a massive 16 mil bbl. The Saudi budget is already creaking under the weight of its enormous infrastructure and sports projects, and the PIF might have to cut back on its shopping spree. Whatever the Saudis may say about being able to weather the storm of low oil prices, it’s clear it would be a very painful experience for them… Just look at our analysis of Aramco’s earnings on the next page!

Markets felt good this morning but by lunchtime Brent flat price began to feel heavy near $64 and it fell back before regathering and
building up to reach the close at $63.58/bbl. Talking about falling back, just how far can the North Sea physical fall? It was so
strong at $1.13 just on 24 April but a deluge of Midland offerings in the North Sea window has tanked it to -48c yesterday, as little
to no buying interest has materialised to absorb those cargoes – though it rebounded slightly to -32.5c today. ‘The North Sea
market is very long,’ said an Asian buyer whose company is going into turnarounds. And the North Sea is long despite loads of
Midland cargoes going East. ‘Some of the Midland sales make no sense but the buyers want to show something to Mr Trump.
These purchases also affect Murban as buyers of Midland cut other competing grades. And don’t forget there’s a lot of Forties
floating about since Grangemouth closed, around 6 extra cargoes a month. No wonder Forties has set the Dated benchmark
recently… But today no sooner had the window opened than Gunvor, Aramco, BP and Unipec all charged in to offer Midland.
Aramco tried to tempt buyers with a 30 May-3 June Midland offered at Dated +$1.15 and offers for 2-6 June at $1.40 over Dated
and 4-8 June at Dated +$1.50. BP offered similarly, while Gunvor also offered an 11-15 June cargo at Dated +$1.45.