The Officials

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!

They’re playing ping pong with the market! But nobody’s laughing. Adnoc is undoing its cut to cargo allocations after a monumental backlash from lifters and the market at large. Some hedges had already been lifted as they had to adapt to receiving 400 kb rather than 500 kb, but now they’ll be getting 500 kb again! This has totally ruined risk management for the affected players and is the worst commercial mistake we’ve ever seen in oil markets! As one source commented, the lifters’ hedges could be 10 bucks higher due to the war craziness of the past week.
The question is now how lifters react: they could refuse to take the full 500 kb amount, having prepared to receive 400 kb they were told to expect. It comes down to who controls the taps pumping the crude into the ship – will they back Adnoc or the lifter…? One trader said “This feels like even more of a spit in the face!” People are not happy – even those not directly affected by the unilateral chopping and changing of allocations. We feel most of all for those who’ve been messed around by this. These wounds are entirely self-inflicted and we ask what kind of market understanding was lacking by those making the decisions…

The Americans are in a good mood again: no more war, their 401(k) balances bulging as the S&P 500 hunts an all-time high! The vibes are good. Just don’t look ahead too far and see the ugly tariffs rearing their head again on 9 July. Oh, and the dollar is getting hammered. Pound Sterling reached $1.3769 in terms of US dollar this afternoon. Everyone is scrambling to get their money out of the US.
Flat price was on the up today as well, for the first time since Israel and Iran cooled their heels. It even peaked just over the $69 mark shortly before the close, though it fell back to $68.92/bbl. Time spread structure has solidified a little with the front spread firming at $1.28/bbl. But we still have a lingering contango from March 26 tenor forwards…

Flat price may have found some firmer ground and steadied in the upper 60s, but the prompt spread is beavering its way up again: by today’s Asian close it had climbed to $1.19, with that strength filtering down the curve. Supply and demand balances
are still showing supply overhangs into Q4 this year, as the Onyx Global Oil Balance projects a 500 kb/d surplus. Once the
summer burn and peak demand season filters out, the longer tem market outlook is a bit shaky, as the global economy continues to struggle with tariff threats and lukewarm growth.

Trump’s on a victory lap at the NATO summit, boasting about how bombing Iran ended the war in an unprecedented chain of events. But now he likes them and he wants Iran to sell oil to China, “They’re going to need money to put that country back into shape. We want to see that happen”, he said. Trump’s rolling out the red Iranian carpet, saying “We’re not taking over the oil” and he won’t stop oil flows to China – he wants to see Iran back on its feet. BFF time. Israel is very mature so surely they aren’t jealous. The Americans, Israelis and even CIA can’t agree! Iran’s now claiming the facilities were gravely damaged – convenient… And the IAEA’s stumbling around in the dark trying to figure out what’s up. They’re playing ‘4D chess,’ said a source.

Square one. It’s a comforting place. You know where you stand. Maybe it’s around a negotiating table again for the US and Iran, following their well-mannered de-escalation earlier this week. Whether or not Trump’s bombing actually destroyed Iran’s nuclear facilities (even the CIA said the damage at Fordow was minimal), he’s certainly quick to claim it as a win, even despite Iran sauntering out of cooperation with the IAEA and being able to continue unfettered oil exports. Credit where credit is due, Trump can rightfully claim that he stopped the shooting between Israel and Iran. Well done! He needed a win as his diplomatic scorecard hasn’t been looking pretty since he came into office. But hey at least he’s got cheap oil again.
According to conversations with market sources, as the under allocation by Adnoc filters through the system, buyers are physically short on the number of barrels received and this causes issues on their refining systems which were counting on the cargoes. And critically the hedges are losing money big time, ‘it is a $12 million loss,’ said a source. Lawsuits are launched through the chain – likely to hit even Adnoc-said equity sources.