The Officials

August dragged the world through a hedge of thorns or a bed of roses if you were on a fancy vacation. We wish Fortunately for many traders, they were off making the most of the end of summer for some holidays, and volatility remained relatively muted in the middle of the month. But things got spicy in the final week!
Of course, the warmongers still couldn’t settle their differences, as Russia and Ukraine continue to bombard each other relentlessly, as Trump runs hot and cold on establishing a ceasefire. Only masochists would get involved in the middle of a family fight.

Please find attached the first quarterly Officials Volume Review, reflective of Q2 2025. Within we provide a summary of global oil derivative volumes, identify key drivers, and provide our forecast for volumes to end 2027.

What happens when an unstoppable force meets an immovable object? Sometimes things get broken or… one side gives up. Well, in this case, India keeps buying Russian oil, no matter how loudly Trump screams and shouts. This was the key feature of the month, as India sought to replicate the Chinese approach of ‘you shall not pass’, giving him the cold shoulder. While Modi was playing it cool, Indian traders got angry – and you wouldn’t like them when they’re angry! They are feeling their independence and Modi got elected on a strength and a MIGA platform. And MIGA and MAGA don’t mix too well. Apparently, India’s prior agreement to buy more American energy products didn’t placate Trump’s ire for their continued purchases of Russian supply. India’s not doing too badly… Q2 GDP smashed expectations, growing at 7.8% – India doesn’t need America, America needs friends.

While Trump is too busy complaining about news hosts and promoting novels, his of course, the Russians and Ukrainians will keep bombing the living daylights out of each other. Partly because they keep destroying each other’s energy infrastructure and damaging the power grids – along with western embassies in Kyiv… Today, the Afipsky refinery in Russia caught fire due to falling drone debris, but authorities said the fire was extinguished by the early afternoon. As expected, though, Druzhba pipeline supply has resumed today – at least in part. At the same time, Russia bombarded Kyiv, killing at least 19 people. We wonder just how much elbow grease Donald is really putting into it.

The excitement continues in the PG as some key grades have recently been bid up. We give you the data: From August 14th, when prices roughly bottomed out, the international benchmark Brent has risen by $1.78/bbl while WTI has gone up by $1.60/bbl. And nearer to us in the Middle East, Dubai increased by $1.99/bbl while Murban jumped by $3.64/bbl.
Which one is the odd one out? Well, the figures show that Murban soared by more than twice the level of Brent and WTI. Why, may you ask? Join us in that quandary because the behaviour is very weird – as in unusual. One of our sources contributed this graph showing that “right now the Murban Brent spread is pricing at 99th percentile.” This spread behaviour is super uncommon. But why?

North Sea divebomb! But Vitol was manning the anti-aircraft guns! Yet more Midland was offered today – even lower than yesterday! The same players showed up, as Mercuria, Gunvor, Totsa and Shell all returned to offer. And finally trades! Vitol couldn’t let those cheap Midlands pass, more so after selling a VLCC into Reliance. Naturally, Vitol needed to load with more ammunition and lifted BP’s 17-21 Sep offer at Dated +$0.75 and Mercuria’s 18-22 offer at $0.70 over Dated. But Vitol’s shooting scared the not so fearless sellers. What? They actually didn’t want to sell. Most ran away, read on…

50% tariff time! India has been frugal with its oil purchases, going for cheap Russian stuff. Unfortunately, that’s come back to bite them, as Trump imposes 50% tariffs as a punishment for being so naughty. OMG, being independent and doing what is right for one’s nation is a sin that must be punished with the tariff stick! But nobody tell the US about buying nuclear fuel pellets from Russia! Shh, shh, he knows but does not want to be embarrassed. India has been running hot and cold trying to send make peace offerings but bottom line they are independent and as Modi says, “No matter how high the pressure, India will continue to build its strength to withstand it.”

Brent bedded in just below $68 after its morning selloff, before sliding further to $67.49/bbl by the close. The prompt spread was enjoying a good day – hitting 60c – until the afternoon, when it slipped slightly, reaching 56c at the close of European trading. And then flat price kept going down. What’s going on, normal market stuff or a leak regarding a deal between the Indians and the Americans? Closer to home, look at the North Sea window. Rarely have we seen such a ferociously offered window! They must have been making up for lost time with yesterday’s holiday. 8 offers in all, not answered with a single bid. Gunvor, Totsa, BP, Mercuria and Shell were all there offering Midland. Mercuria was the most aggressive, offering an 18-22 Sep cargo at Dated +$0.95, while Shell’s 15-19 Sep at $1.25 over Dated was the next best.

In the week ending 22 August 2025, Gasoil futures volumes rose significantly w/w across the first three tenors. Meanwhile, Brent futures volumes increased across November (26.14%) and December (11.53%), while the October tenor held steady w/w. WTI volumes, on the other hand, barely increased on the October contract, while volumes in the November and December tenors dropped slightly.

We were on the bull-drawn carriage yesterday and Brent broke through $69 in the afternoon! It slid back to just below $68 after the close this morning, but that quick peek above $69 looks like laying the foundations for an assault on the $70 handle. But it was Murban in the real driving seat today, reaching a massive $71.54 at the Asian close! This puts the Murban/Brent futures spread at $3.28, its widest since July 24. This should be bullish for Brent eventually, as buyers will look to replace the pricey Murban with more competitive alternatives. See our graph!

$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.