Crude

Market Overview

Most crude premiums shot higher

Crude

Murban and Oman premiums traded up more than 10$/bbl higher in July when US-Iran deal soured and more tankers got attacked at the Strait of Hormuz, particularly at the Omani route.

WAF crudes also got a leg up as loss of CPC barrels saw Europe buying crudes that have a safer source of supply and India also coming out to bid for non-Strait of Hormuz and non-Red Sea barrels.

Aside for cheap Djeno bought at Dated-10$/bbl in early Aug, no other signs of China actively buying spot WAF at higher premiums.

The shock announcement of Murban futures suspension is likely to reduce Dubai liquidity due to loss of hedging flow.

Iraqi heavily discounted

Crude

Iraqi crudes had to be heavily discounted in order to incentivize buyers to load from inside the Strait of Hormuz.

SOMO sells Basrah Medium and Basrah Heavy on a FOB basis from Basrah Terminal.

No actual Iraqi vessels were hit so far, but the July escalation involving a Qatari LNG carrier and a Saudi VLCC was enough to spook the end users from securing Iraqi barrels on FOB basis, with MRPL and IOC cancelling their plans to lift Iraqi crude.

Majors and traders then took on the risk of chartering vessels to sell on CFR basis to end-users or STS off Gulf of Oman.

WTI arb shut on paper but it don’t matter

Crude

WTI vs Murban arbs are shut into Far East.

However arb economics matter less now, because the supply diversification angle is ever-so crucial with major chokepoints in the Middle East threatened.

Japan in particular imported a record high US crude in June 2026 (majority WTI, with some Mars and WTL) and that trend is set to continue for August liftings. July is likely lower since they didn’t need that much US crude during the June trading window due to the mini-reopening of the Strait of Hormuz.