Brent hits 100$/bbl and the China factor
- Nov ICE Brent hit 100$/bbl briefly today, indicating the escalating geopolitical risks with significant warring activities as more tankers got hit in the past few days.
- More importantly Sep Dated Brent is already at $109/bbl and Sep DFL has correspondingly shot up to ~9$/bbl level, indicating a stress on the physical markets as the markets worry about the promised AG crude supply making their way out safely.
- Without ICE Murban as a barometer, we now turn to Oman as our indicator for AG crude FOB movements in the market. Nov Oman was at a whopping $27/bbl premium vs Dubai yesterday and would have likely inched up further today.
- China additionally has been seen bidding everything from AG, WAF and South American barrels. Djeno which is China’s mainstay WAF grade has been procured at Dated-5$/bbl, a big step increase of ~$10/bbl premium.
- The purchases have been very much an SOE-driven one rather than the independent refineries. SOE refineries are coming out of maintenance season and can afford to buy more to load up their units. They started with snapping up ESPO and cheaper barrels in the market (Iraqi), even moving to Russian Urals which had been off-limits due to sanctions risk, and now picking up the other crudes in the spot market.
- Strong margins have been quoted as a reason for the return of the Chinese buying, but the margins have been there for sometime so I do not believe this is the main reason. It is more likely a change in the government mandate on crude procurement/refinery runrates strategy that will still be tightly controlled by product export quotas.
- However the other side of the equation is a likely lower runrate from the independent refineries. They started the year losing access to cheap Venezuelan barrels, then competing with India for Russian barrels, losing Iranian crude and feedstocks and now even needing to compete with SOE’s for Russian barrels. The bigger teapots do have crude import quotas to buy non-sanctioned crudes but marginal players will likely not be able to pay up for the higher feedstock prices.
- All in all, we do anticipate a higher crude import trend from China, but do not bet on a return of 4 mbd vs last month as the teapot factor weighs in and some structural demand destruction on products have been set in place.
(September Dated Brent)
(Sep DFL)
About the Author
June Goh | Senior Oil Analyst, Sparta Commodities
June is a senior oil market analyst at Sparta specialising in global crude trade flows and refining economics across Asia and Europe. Her analysis is regularly cited by Bloomberg, the Financial Times, and Reuters. With a significant following in the energy community on X (@JuneGoh_Sparta), June’s insights are a staple for institutional traders navigating regional market shifts.
Connect: LinkedIn / X
About Sparta
Founded in 2020, Sparta made waves in the commodity analytics space in March 2022 when it secured a $6m series A investment from Singular. This success then later snowballed into a further $17.5 million in a series A funding round led by the technology venture capital firm FirstMark, with participation from existing shareholder, Singular.
The platform, created by former traders Miles Moseley and Felipe Elink Schuurman, is designed to answer a common problem shared by most traders: 90% of pricing data required to make trading decisions is kept in silos and shared manually by voice, email, or chat.
Sparta breaks these existing data silos and combines the physical and paper markets to provide traders with live access to global raw prices, from futures and swaps to forward freight and physical premiums. We work with clients globally, including Philips 66, Chevron, Trafigura, Equinor and more.
Real time alerts, set to your specifications
Continue reading
APAC Chart Pack October 2026
Freight chaos is crushing refining margins. Here's what traders should watch.
05 OCT 26 - 14:06
Oil swings with focus on deep Saudi price cut and Yemen fighting
“Pipeline, refinery and loading infrastructure remain vulnerable to attacks by the Houthis,”...
05 OCT 26 - 09:47