Biodiesel and RD Resist the Hormuz Repricing
Another energy selloff pushed Brent down 5.26% to $79.36/bbl and August ICE gasoil down $70.25/mt to $1,136/mt. August/September gasoil backwardation fell to +$41/mt, while August/December dropped to +$176.25/mt from almost +$288 only days ago. Heating-oil and 3:2:1 screen cracks remain paralyzed near $81.42/bbl and $56.47/bbl, both close to twenty-year highs - Trump scared refiners' margin with his comments. Strait of Hormuz traffic remains the best physical test of the settlement narrative. Crossings are running near five vessels per day versus a 2021 to 2025 average of 37.6 and a previous low of 28. The latest breakdown showed only three tankers, including two chemical or product carriers, with no crude or LNG tanker crossing. Gulf oil flows remain near 36% of prewar levels. Futures often price a reopening before inventories rebuild, which challenges our complacency thesis. Still, curve compression now assumes a pace of normalization unsupported by traffic running near 13% of its historical average. Holiday participation makes this disconnect easier to ignore and leaves the market exposed to a fast reversal.
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