Gasoil Breaks $1,300 and SPR Falls Below 300 Million Barrels as Hormuz Reprices Risk & Cracks Spike
Monday’s message is less about repeating the weekend headlines and more about how the market has chosen to price them. Brent rose 4.64% to $87.43/bbl and WTI 4.67% to $81.83, while nearby ICE gasoil jumped 9.94% to $1,316/mt and heating oil gained 7.02%. August/September gasoil widened 59.4% to $93.25/mt, August/December rose 31.2% to $253.50 and the heating-oil crack reached $93.62/bbl, close to its 2022 extreme around $96. Tanker tracking showed no visible outbound Hormuz transits over the weekend, with the first identified commercial VLCC movements appearing Monday. At the same time, the SPR fell to 298.7 million barrels after another 6.1 million barrel August draw. Of this, 105.3 million barrels are sweet crude and 193.4 million sour. Sweet refers primarily to sulfur content, and actual diesel yield still depends on API gravity and refinery configuration. Its importance is optionality: low-sulfur crude generally requires less desulfurization and hydrogen to produce clean transportation fuels, while different refineries need different crude grades. The declining sweet pool therefore reduces flexibility, while the sub-300 million total remains the bigger strategic number. More importantly, a 9.94% gasoil move against a 4.64% Brent move tells us the immediate stress is already appearing in products.
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