The Officials

The broader market was waiting for the outcome of the Trump and Xi negotiations as the impact is far and wide. The meeting was a 12 out 10 said Trump, but the details said it was a 3. The two nations essentially agreed to play sort of nice for another year and see then how things are going. Trump said the Chinese agreed to buy anything American but the price of soya beans fell by about 1.5%. If it was s such a good meeting why would the American farmers be so disappointed, we wondered. Regardless, even a fake agreement is better than actual shooting, so we are happy.

The physical fizzes up! And the flat price also jumps! Oh, and EIA inventory data is all bullish with inventories for crude and products falling by nearly 16 million bbls! If you listen to the narrative makers the world is awash in oil…except inventories are falling. Wake up, please. The North Sea kicked into life today with a plethora of bids across grades. Midland, Brent, Ekofisk and Johan Sverdrup were all in the frame and the physical differential surged!

A battering for markets! Flat price and spreads both got hit hard this morning, with December Brent barely hanging onto the $64 handle as the prompt spread falls into the mid-50c range. But the storm passed later in the day. It is hurricane season, what can we say?

Kuwait in refinery turmoil! The Al Zour refinery fire has everyone running around in a fluster, as crude tenders are rapidly issued, product is tight but sources tell us diesel was loaded today – though obviously from storage tanks. Pakistan seems particularly exposed, as a source pointed out 150kt of their 200kt monthly gasoil purchases come from KPC…

In the week ending 24 October 2025, exchange traded futures volumes were largely up w/w across most instruments due to the imposition of the Russian sanctions, which saw a major uptick in market activity.

A lot of fun and games in the spot partials trading but let’s start first with the funny mentals. China’s sanctioned terminal is reportedly going full Russian because a) they are sanctioned and all they can get is Russian and Iranian and b) nobody will touch with a barge pole except the Russians and the Iranians. This is the real effect of the sanctions. And the Indians are playing a two-sided game buying some non-Russian while not fully rejecting it. Sources say Tatneft will be busy selling loads of Russian crude. And the mechanical issues are huge. A Kuwait unit essentially burned down and runs dropped so much that they need to sell extra crude in tenders. And the Indians are also facing acidity issues -not just with Trump but at one of the HPCL units. Messy…end result gasoil goes up and is also worrying Pakistan and others who are short.

Kuwait Petroleum Corp’s Al Zour refinery goes down and throws the gasoil market into a frenzy! KPC then began shooting out crude in several tenders, offloading it as it could no longer refine it all. Issuing two tenders for 800 kb cargoes shows the Kuwaitis are trying to offload crude they can no longer put to good use. Add in market murmurs of an outage of the hydrocracker (10 kb/d capacity) and reformer (13 kb/d) at HPCL’s Mumbai refinery and diesel cracks surged to their highest since February 2024 – both in Europe and Asia! Ans with the Middle East in focus, Iraq halted loadings after the fire at the Zubair oilfield.

Who’d have thought when you sit down and talk you can have a breakthrough! After all the palaver, they managed to find common ground. Markets loved it: S&P 500 futures jumped 0.8% to a record high and Brent opened 40c up. Yet, through the Asian session, Brent fell to $65.48/bbl by the close, despite the prompt spread holding steady at 76c.

There are sanctions, countersanctions and workarounds. Anybody thinking the consumers do not like the Russian black stuff, better get a job writing comics or at a Swiss cheese factory. The alternatives always bore through; it just takes a bit of time. Hungary is already looking for workarounds – and admitting it publicly! It took literally a day. The oil will leak out eventually one way or another. That being said, the Europeans are still set on plugging as many gaps as they can – with a few conveniently placed loopholes. Meanwhile, Starmer said, with a straight face, “We are choking off funding for Russia’s war machine.”

The mania has eased and we are back in the $65-70 range, or at least at the bottom of it. Markets are like wild animals and they like to get out of the pen, but they get lassoed and pulled back to where they belong. The market is not long anyway, and we recognise credible data is so hard to come by. And one of the few points we still kind of trust is the US inventory data. Please use your grey matter and tell us why the market is long. Swimming in oil and inventories are really at the bottom end of a multi-year cycle. We are willing to listen, but really, where is the surplus?

Onto flat price action, Brent futures have bounded up on today’s news, throughout the session, hitting fresh highs and trading above $66 post-window. We have now broken this imaginary ceiling that was haunting us since 9 October! Meanwhile, spreads are in happy land too: the prompt Brent spread reached 65c by the close and it has now reached a new high of 75c! In terms of the curve, we’re in backwardation almost throughout the 2026 spreads!

Shall we be worried? The Russia/Ukraine + war is getting worse with more nations being forced to take sides. The scope of Western sanctions keeps on growing and the line seems to be pointing to a wider war. Russian nuclear drills, Tomahawk missiles of mystery origin, wide-reaching sanctions… it feels like things are coming down to the endgame. Lukoil and Rosneft were hit by OFAC last night, as Trump raged about an immediate ceasefire – we wonder which of Trump or Putin would have felt their time was most wasted by a meeting. A dejected Russian source commented “I think all of this is terrible. We are 10 minutes before the Big War ☹”. Even Medvedev said Trump “is now firmly on the warpath against Russia.” We don’t like this road and want to get out of the car before there’s a big smash!

Flat price is up in a sharp reversal from the scary downward momentum last week which took the price down to nearly $60. Bullish inventory in the US helped a great deal but the markets were running up ahead of the stats. And we have now bounced up $2.50 showing the bearish talk was a bit of nonsense and many players were overextended. Plus, $60 is an important psychological level where new buying tends to come in – it’s becoming a real level of support, following the similar bounce we saw at that point back in May

Europe’s getting big for its boots! The rumour that the EU is considering sanctioning Chinese state-owned companies is tearing through the Asian market like wildfire, as Chinese, Singaporean and Indian sources are all talking about it. If, as we’ve heard, PetroChina Hong Kong or another unit could be in the gunsights of the EU. Other state entities are not going to be hit, said a source close to one of the large state oil companies that has investments in the Middle East. It seems the EU is letting its Ukraine war frustrations out on a bunch of unrelated Chinese entities.

After all the mania about surging oil on water and a mind-boggling jump in exports w/w last week, it seems there was “a bug”, according to Kpler, a BIG SCARY BUG according to The Officials. We have been telling our readers not to trust the published data. As recently as yesterday: “…as price war narratives mount and increasing paranoia about ‘oil exports vs imports’ with funky shipping numbers. Just remember, folks, don’t believe everything you read!”