Trade with Conviction

Felipe Elink-Schuurman, Jay Maroo, Abhishek Kumar and Jorge Molinero unpack Iran's shift from blocking Hormuz to policing it, mounting strikes on Saudi and Russian energy infrastructure, a bearish TD3C freight call, Russian diesel exports returning, and tight Naphtha and LPG markets heading into winter.

 

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(00:04:47) Escalation Risk Into Midterms: US troop buildup, Houthi strikes on Riyadh and Aramco, and Trump-Netanyahu strike talk ahead of elections.

(00:13:04) Russia's Diesel Bandaid: Putin-Trump OFAC deal adds export barrels, but refinery damage still caps Russia's real capacity.

(00:18:47) Freight Tops Out: Jay turns bearish on TD3C as weak refining margins cut appetite for expensive crude freight.

(00:29:40) Diesel Floods Back: EU SPR releases and recovering Russian exports could flip diesel from tight to oversupplied by December.

(00:43:18) Naphtha Tight, LPG Strong: Jorge flags scarce naphtha, firm East-West arbs, and tightening butane as winter demand builds.

Felipe Elink-Schuurman, Michael Ryan, Aaron Kildow and Nikolas Plonski unpack Hormuz exports rebounding near pre-war levels despite daily tanker attacks, VLCC rates near $1.2 million a day, Trump's shelved diesel export ban, EU and US SPR releases, and why gas oil cracks still look bullish into Q1 2027.

 

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(00:00:20) Hormuz Holds, Barely: Crude exports near pre-war levels even as tanker attacks continue daily and Iran talks go nowhere.

(00:02:50) VLCC Rates Go Vertical: Freight fixtures surge out of the Gulf as VLCC rates jump from $80k to $1.2 million a day.

(00:12:54) Ukraine Hits Russian Refining: Lukoil's Volgograd refinery and a Transneft hub get struck, cutting roughly 5% of Russian capacity.

(00:15:06) Distillates and the SPR Release: EU and G7 SPR releases crush gas oil spreads, but Nikolas still likes Q1 2027 cracks.

(00:25:18) Freight and Crude Trade Calls: Michael turns bearish TC2 spreads, Aaron flags a $25 a barrel freight bill eating North Sea margins.

(00:31:03) Gasoline Holds the Line: RBOB stays firm on hurricane risk and tight US octane, with ARA still the Atlantic's key supplier.

Host June Goh welcomes Sparta colleagues James Noel-Beswick and Jorge Molinero to unpack the diesel crisis: why global stocks have hit 10-year lows, how geopolitics and refinery outages are compounding the squeeze, and where traders should look to position next.

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Chapters:

(03:59) Red Diesel and the US Response: Washington explores red diesel sales and fuel tax cuts as diesel prices hit $6 a gallon. EU pressure intensifies as the White House threatens export bans.

(04:00) Middle East Flows and Supply Reality: Saudi East-West pipeline back online, but production still far below capacity. Global crude rebounding, but refined products remain dangerously tight.

(06:35) China's Policy Pivot: Crude import quotas flat. Product exports suspended. The refinery outage crisis spreads—India's MRPL fires, potential strikes at US Gulf refineries.

(08:47) Light Distillates and Freight Gasoline stocks at 12-year lows. Naphtha weakness, but gasoline holding firm. LPG tight. Freight—specifically TC5 from Europe—up 65% in one month.

(15:38) The Diesel Armageddon: Singapore diesel cracks at seasonal highs. All regular diesel arbs into Singapore closed. European pricing bucking the trend. Heating oil cracks exploding.

(20:23) Trade Calls and Crude Outlook: James makes the bull case for Q1 heating oil cracks (at $90 per barrel). June covers the US SPR release and Mars basis under pressure through year-end.

Felipe Elink-Schuurman, June Goh and Michael Ryan unpack the potential US diesel export ban, the Saudi pipeline attack and Russian refinery strikes reshaping crude flows. June covers the diesel, gasoline and crude fallout if the ban lands, while Michael maps the freight rush already underway on TC14 and VLCCs.

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Chapters: 

(00:31) Trump's diesel ban threat: the backdrop: Trump backs a full or partial US diesel export ban; midterms, low stocks and Hormuz disruption drive the panic.

(03:09) Russia strikes and Saudi's pipeline scramble: Ukrainian drones knock out Russian refineries as Aramco reroutes 14 million barrels after an Iraq pipeline attack.

(09:51) HOGO whiplash and the diesel ban math: October Hogo swaps swing violently as June maps the price path if a 90 day export ban hits.

(13:49) Freight scramble: TC14, MRs and the LR2 dirty trade: Michael on the rush to fix diesel cargoes, TC14 risk, and MRs turning dirty if US exports stop.

(22:14) Fuel oil, refining margins and China's holiday lull: June and Hoa on high sulfur fuel support, razor thin refining margins and China's Golden Week pullback.

(29:34) Gasoline's own diesel story: ARA undercuts the Gulf Coast, TC2 rallies and East-West Q4/Q1 spreads look primed for a repeat.

Felipe Elink-Schuurman, Jay Maroo, Aaron Kildow and James Noel-Beswick break down the Petroline pipeline strike forcing Saudi crude back through Hormuz, freight rates hitting record highs, and diesel cracks near $100/bbl. The real constraint now is products, not crude, with no clear sign of demand destruction.

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Chapters: 

(01:40) Petroline strike and the Hormuz squeeze: Saudi's Yanbu pipeline takes a direct hit, Houthis seize Mocha, and barrels are forced back through Hormuz.

(06:25) Crude: Iraq's discount and Saudi's pincer: Iraq sells at steep discounts to move barrels via ADNOC as Saudi crude gets squeezed on every side.

(18:40) Freight: the Hormuz premium blows out: Rastanura to Ningbo nears $1 million a day as owners charge up to $500k extra to transit Hormuz.

(34:25) Fuel oil: Saudi's feedstock problem: Lost Red Sea refining capacity tightens hi-5 further, with LSFO diverted into conversion units instead of blending.

(38:53) Diesel: record cracks, closed arbs: Gasoil cracks near $100/bbl and Asian spreads hit decade highs, yet most European and Asian arbs stay shut.

(47:29) Gasoline and the missing demand destruction: Every signal says sell, but nobody's finding the demand destruction that should be capping this rally.