The Officials

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!”

In the week ending 17 October 2025, exchange traded futures volumes were largely up w/w across most instruments. On a y/y basis, compared to the week ending 18 October 2024, exchange traded futures volumes increased across the front three tenors for Brent and gasoil.

Flat price is rebounding. We told in yesterday’s European edition that the bearish narrative seemed overcooked. Too many bearish stories by so many and where is the extra physical oil? Yes, there is some by Saudi Arabia and that is it, the rest are producing the way they were so the extra marginal barrel is yes, there and weighing the market down but by the millions being reported. We just don’t see it.

Despite its downward adventure on Friday morning, Brent isn’t quite ready to slip below $60 just yet, bouncing back to trade around $61 into the early afternoon. The prompt spread dropped to just 12c at the close, while the Jan/Feb’26 spread threatened contango in the window. Outright contango is so close we can taste it! Have we time travelled back more than a decade? There’s more and more talk reminiscent of 2014, 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!

It’s TACO Friday, ladies and gentlemen! Go to a nice Mexican restaurant – or Chipotle if you like big portions, we don’t advertise anything; we just state the facts. Anyway, Trump is set for another mega taco trade with China, calling that the tariffs on China will not stand, as “such high tariffs on Chinese goods [are] not sustainable.”

Happy Diwali, everyone! India might be celebrating but the mood is souring folks, from East to West structures are getting hammered. “You can see the panic in the Brent spreads… the market is bailing aggressively” said one trading source. “There is also buying at the back… that’s killing the structure”, said another, who pointed to massive consumer hedging, especially from airlines. But the front is getting sold into too, just look at the prompt Brent spread, down at 15c by press time.