Great terms on 40MB of medium sour
- US SPR offered 40MB of sour grades under FY26 RFP #4
o For delivery in Nov-Dec 2026.
o 20MB from Bryan Mound (Freeport, TX) and 20 MB from Big Hill (Beaumont, TX).
o Bids are due 6 Oct 2026
- First replacement window for Bryan Mound is Q2 2027 at interest rate of only 7.5%.
- First replacement window for Big Hill is Jun-Sep 2027 at interest rate of 9.5%.
- FY26 Release #2 (delivered barrels in Jun and July) offered min interest rate of 18%.
- Note: the DOE charges volumetric interest rates on SPR releases. The interest rate agreed to determines how many barrels the taker needs to return in the replacement window.
- Timing on this release matches well with what should be strong refinery demand in USGC before Spring turnaround season weakens regional demand as early as January.
- Given extreme diesel cracks and recent pressure on Mars basis our sense is that the DOE should be able to find takers
- Should keep GC Medium grades under pressure for balance of year.
- Currently, Mars is landing $2-$4/bbl higher than medium grades from Guyana and WAF barrels in NW Europe for early December.
- We are looking for Mars December FOB to drop down below $1/bbl and revisit levels last seen in early August.
- Mars basis or FOBs could go even lower if a diesel export ban is also announced for the same time.
- Lack of bids on SPR release would have us cover short FOB position.
- WTI/Brent will likely also need to widen out as freight is already tight in the region and adding more barrels to export will likely keep upside pressure on USGC dirty freight.
- TD25 freight currently around $143/mt off from recent highs, still near March spike of $145/mt.
(Mars should price more competitive than SAM or WAF into NW Europe if all 40MB are exchanged)
(Mars December FOB already off recent highs but 40MB more SPR crude should put the market back down to recent lows)
(TD25 freight off from recent highs but still historically expensive)
(Mars December FOB already off recent highs but 40MB more SPR crude should put the market back down to recent lows)
About the Author
Aaron Kildow | Crude Commodity Owner, Sparta Commodities
Aaron is Sparta’s Commodity Owner for crude, covering physical and financial oil markets, hedging structures, and customised oil balances. He co-founded The Oil Balance and spent over a decade at Macquarie Group building supply/demand models for Cushing, PADD 1, and PADD 3, with earlier trading and derivatives roles at CHS, Musket Corp., and Prudential Financial.
Connect: LinkedIn
About Sparta
Sparta is the AI leader for commodity trading, home to Leonidas AI, the first decision-making engine for oil and commodity traders. Backed by USD 42 million in Series B funding led by One Peak, with participation from returning investors FirstMark and Singular, the same investors behind AI leaders like Legora, Dataiku, and Synthesia. From independents to multinationals, the world’s leading commodity teams use Sparta and Leonidas AI to move faster, trade smarter, and stay ahead of the market.
For more information, visit Sparta or follow us on LinkedIn.
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