Dec Brent–Dubai swap-swap: −$2.38/b
Hormuz is still pricing the market.
VLCC freight outside the Gulf is falling fast. Inside-Hormuz freight remains structurally expensive. Jet is weakening in Asia, while European product balances remain tight.
The market is fragmenting by geography.
Middle East physical pricing strengthened for a second session.
• Dated Brent: $119.79/b ↑$1.66 • Dubai cash/futures premium: +$5.54/b ↑$1.33 • Dec cash Brent–Dubai: −$0.86/b
But the deeper signal is in the spread:
That is the weakest level since 2001.
Middle East barrels remain expensive relative to Atlantic crude once freight is included.
VLCC FREIGHT — CORRECTION CONTINUES
Outside Hormuz, freight is falling quickly.
• Gulf of Oman → Far East: $231.48/mt — seventh consecutive decline
• WAF → East VLCC: WS601.5 ↓24 • Brazil → China VLCC: WS550 ↓50 • USGC → China VLCC: $59.5m ↓$3m • WAF → UKC Suezmax: WS742.5 ↓90
The broader dirty market is clearly correcting.
Global DTI non-eco: $821,119/day ↓$26,722
HORMUZ — STILL A DIFFERENT MARKET
Inside the Persian Gulf:
PG → China VLCC: WS1175
Inside-Gulf indications: ~WS1200
Gulf of Oman: WS630–700
The spread remains enormous.
And on Oct 20:
0 VLCCs were detected transiting Hormuz
Security remains the reason the inside-Gulf market refuses to normalize with the rest of the tanker complex.
JET — ASIA WEAKENS
Singapore jet deteriorated sharply.
• Jet cash differential: −$0.04/b vs MOPS • Previous: +$0.64/b • Daily move: −$0.68/b
Jet regrade versus 10ppm gasoil:
−$0.78/b
The Asian jet market has flipped from premium to discount in just one session.
GASOIL / DIESEL
Singapore gasoil held up better:
• 10ppm gasoil cash diff: +$1.15/b • Up $0.32/b d/d
Europe remains structurally tight despite weaker flat prices.
• NWE ULSD FOB: $1,451.25/mt ↓$16.75 • NWE jet FOB: $1,564.50/mt ↓$33.50 • Jet physical crack: $85.36/b
India → Europe diesel/gasoil arrivals are expected around:
1.3m mt in October
vs just 573kt in September.
US crude stocks fell again.
• Commercial crude: 412.5m bbl ↓3.06m • Cushing: 27.6m bbl ↓987k • Refinery runs: 16.6 mb/d • Crude exports: 4.50 mb/d
The draw continues even with refinery runs holding high.
Singapore HSFO weakened modestly:
• 380 CST cash diff: +$46.33/mt • Down $3/mt d/d
At the same time, European fuel oil continues moving east and west despite expensive freight.
October Europe loadings toward Asia/Americas:
322,654 mt
MRs strengthened in the West.
• USGC → UKC: WS375 ↑10 • Cross-Med: WS510 ↑45 • Black Sea → Med: WS540 ↑45
Inside-Hormuz LR freight remains elevated, while outside-region rates continue to soften.
Again: two different markets.
Urea remains firm.
• Egypt granular FOB: $535/t • China prilled FOB: $347–352/t • Brazil CFR: $470–485/t
China exported 2.45m t of urea in September, up 78% y/y.
India absorbed roughly 1.6m t of that volume.
Meanwhile, European production economics continue to worsen as gas rises:
• TTF month-ahead: $28.60/MMBtu • NW Europe urea production cost: $678.38/t FOB
🔺 Dubai physical premium strengthened for a second day 🔻 Atlantic and Gulf of Oman VLCC freight continues correcting ⚠️ Inside-Hormuz freight remains structurally disconnected 🔻 Asian jet structure deteriorated sharply 🔺 European diesel supply remains tight despite weaker flat prices 🔻 US crude stocks fell another 3.06m bbl 🔺 Urea remains firm as European production costs rise