Crude

Market Overview

Prompt AG barrels depressing Dubai

Crude

ADNOC has tendered 14 mb of Upper Zakum, Das and Umm Lulu in early June, and a second tender has also been issued for similar grades – all basis loading June till August FOB basis Fujairah, Zirku or Das Island as well as via STS in Fujairah to Sohar range and Malaysia.

2 VLCCs of Kuwaiti Export Crude were offered to the market as well.

The typical AG crude cycle in June is for August loading barrels. Thus all these prompt barrels that are making their way out of the Strait of Hormuz are putting pressure on the Dubai market, reflected in a widening BDSS.

With China also not keen to participate in buying, the rest of the Asian refineries get to pick up cheaper, lower risk cargoes and lessen the need to buy arb cargoes from the Atlantic Basin.

The forward crude diversification picture remains though because the risk for cargo supplies loading from within the SoH is still high.

Brazillian over WAF to China

Crude

China has been pulling more Brazillian grades over WAF crudes.

Tupi, Buzios and Mero complex margins are generally better than Cabinda for Far East complex refiners.

The neglect from Chinese buyers has driven WAF premiums down, with Hungo premium about 6$/bbl lower from its peak in April.

With continued weakness from China and the inability for the rest of the market to meaningfully absorb the light sweet, high nitrogen crudes, WAF FOB premiums will remain distressed.

Heavier crude alternatives secured

Crude

India has emerged as the second largest importer of Venezuelan crude in May 2026.

Venezuelan crude now accounts for ~9% of India’s total crude intake.

South Korea plans to increase Canadian crude imports by about 3 times in 2026 to 16 mb and is exploring ways to increase to 20 mb annually.

Iraqi tankers had been allowed to pass the Strait of Hormuz from early April, but the pace of loadings only picked up earlier this month, with about 7 mb moved so far.

We may start to see the light-heavy refinery margin weaken as the heavier crudes start pricing cheaper while FO cracks remain supportive.