Three right arrows
Position coordinates
Insight Weekly Market Report Market Report - 04.08.2026

Market Report Week 32 - 04.08.2026

Other insights Aug. 04, 2026
Market Report Week 32 - 04.08.2026 Download the full report here

Bunker Port Brief

ARA

MGO is extremely tight with longer lead time. Rest normal.

Fujairah

The ongoing conflict continues to create demand destruction for the ports in the Middle East. Fujairah has very good product availability across all grades and with the weak demand it has begun to put pressure on delivered premiums.

Panama

Very quiet.

Port Louis

Increased demand last week due to the Red Sea issues has seen EDD's pushed out; many are mid-month supply at earliest majority. Premiums are still sitting same as last while, even with more demand, as suppliers wanting to shift products.

Durban

Tight HSFO avails in the market as replenishments are yet to come, expected in the next 2 weeks. VLSFO avails fine and some suppliers take any volume they can when it is seen, at lower premiums than last weekly historical. Gasoil avails OK, but levels still remaining high due to government pricing.

Walvis Bay

Tight HSFO avails as remains; VLSFO demand has been tepid since last week - poor weather remains in place in the region; anchorage supplies always taking preference. Premiums dipping as suppliers try take in what volume is seen.

 

Gibraltar, Malta, Houston and New York did not report this week. 

 

For port availability and demand, download the full report here.

Oil and bunker update: Escalation risks remain high for crude and tight gas oil and VLSFO markets


Brent crude oil recovers once again as escalation fears are on the rise


Brent crude oil prices fell sharply in June, notably after the Memorandum of Understanding was signed on June 17, providing a 60-day ceasefire. However, the ceasefire broke down in July, and Iran closed the Strait of Hormuz once again, and the US carried out several airstrikes on Iran.

Over the last couple of weeks, the situation has escalated further. The Iran-backed Houthis threatened shipping in the Red Sea, a drone hit an LNG tanker in Egypt, and on Tuesday Iran carried out a surprise attack on a US base in Jordan.

Ahead of the weekend, concerns about further escalation were growing. Trump had once again promised to launch a massive military strike against Iran, while Iran had promised massive retaliation. However, Trump apparently developed cold feet over the weekend, and the attack was called off at the last minute. According to various media outlets, Saudi authorities were among those that placed intense pressure on the US to de-escalate the situation amid fears of Iranian attacks on energy infrastructure.

In a post yesterday evening, Trump wrote that negotiations are under way and that further meetings are planned. However, Iran denies that negotiations are taking place with the US or its allies in the region. Iran is talking to Oman about how to control the Strait of Hormuz. According to Iran, an agreement would not mean that the Strait would immediately reopen to traffic.

The clearly conflicting messages mostly suggest that no actual negotiations are taking place, though Qatar seems to have circulated a proposal for a short-term US-Iran deal. But the risk of escalation is still high in the coming days. At the same time, very little oil continues to pass through the Strait of Hormuz. According to Bloomberg's AIS-based tracking data, no crude oil tankers have passed in the last 24 hours. Note the data does not include vessels going dark.

Chart 1

The US may choose to resume its military attacks on Iran as there seems to be no talks ongoing, or Iran may choose to escalate, as we saw last week with the attack on an LNG vessel in Egypt and the surprise attack on the US base in Jordan. We therefore expect the oil price to start rising again over the coming weeks.

More chokepoints now impacted


Importantly, compared to before the summer break, more choke points are now impacted. Strait of Hormuz remains effectively closed, the Houthis ' campaign seems to impact shipping in the Red Sea, and the latest Iranian attacks on an LNG vessel in Egypt may even put the Suez Canal at risk. Add to that the successful Iranian attacks on Russian energy infrastructure that have already led to a stop for Russian diesel exports. The loadings of oil from Kazakhstan at the CPC terminal in Novorossiysk have also been impacted by the war in Ukraine. 

 

Hedge the remainder of 2026


Hence, even though we are well above the June price level now, we argue that the current price level is attractive for buyers, given the risk/reward balance. Oil and many product curves remain in backwardation. It may therefore be appropriate for buyers to lock in exposure for the remainder of 2026. It is not yet the right time to enter into new long-term hedges for 2027 and 2028. 

Chart 2

Bunker/fuel update

In the fuel oil market, VLSFO in particular became more expensive during July, as measured by the crack. VLSFO is a blended product, and high cracks for refined products such as petrol and diesel increase demand for VGO, which – as a blending product - is used in the production of VLSFO.


Threats to shipping in the Red Sea have also increased demand for bunker fuel, as sailing distances lengthen when vessels are rerouted around Africa rather than through the Suez Canal.

More expensive VLSFO has pushed the so-called HI5 spread higher during July. HI5 is the price difference between HSFO and VLSFO.

HSFO has developed very differently. The HSFO crack now trades at levels comparable to those seen in the second half of 2025. In Rotterdam, the 1M crack is USD -10/bbl. The market remains well-supplied with HSFO. Demand is lacklustre, and supply is adequate, with high refinery run rates adding more residual fuel oil to the market.

Chart 3

Gasoil developments – cracks moved higher during July

The ICE Gasoil crack declined through June and traded briefly below USD 40, but has since recovered during July and briefly traded above USD 80/bbl. This underlines that the distillate market, notably Gasoil(diesel/MGO)) remains much tighter than the crude oil market. The crack, at USD 65 today, is also still well above the USD 20-25 level seen before the war.

Russia has stopped exporting diesel; there is very little refined product coming out of the Middle East; Chinese exports are limited; and global inventories are small. The ICE gasoil curve remains in backwardation, also pointing to a tighter market than crude oil. 

Related insights

Explore all insights