Dated Brent Above $120 Signals a Serious Oil Squeeze
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Physical oil markets face a severe supply crunch as Dated Brent surges above $120 per barrel despite ICE Brent slipping toward $101, signaling a growing disconnect between futures and physical market fundamentals. European diesel releases, regional tensions, and China's export ban are intensifying the tightening.
Physical oil markets tighten sharply as Dated Brent surges above $120 despite ICE Brent slipping toward $101.
Friday, October 02, 2026
The European diesel stock release, droned tankers in the Strait of Hormuz, and China reinstating its refined product export ban have all played their part in this week’s extremely volatile trading, with ICE Brent edging lower to $101 per barrel. That said, the physical oil market has been moving in the opposite direction, with Europe’s main physical benchmark Dated Brent (which should technically underpin ICE Brent’s moves) jumping above $120 per barrel. This suggests the physical market is a lot tighter than news headlines would care to admit.
OPEC+ Expected to Hold November Oil Targets Steady. OPEC+ is expected to keep November output targets unchanged at Sunday's meeting, as its core producers still pump 5 million b/d below pre-war levels despite August production rising by 630,000 b/d month-over-month to 25 million b/d.
Europe Moves Toward Massive Diesel Stock Release. EU governments are mulling the release of 50 million barrels—about 17% of EU emergency diesel inventories—over 20 days after US President Donald Trump threatened to introduce a diesel export ban, although final volumes are yet to be confirmed.
UN Warns Fuel Subsidies Could Exceed $1 Trillion. UNDP warned subsidies could exceed $1 trillion in 2026 as the US-Iran war, triple-digit oil prices and rising borrowing costs strain budgets, with government fuel relief shielding 130 million people from falling below the $6.85-a-day poverty line.
China Bans Fuel Exports Amidst Golden Week. Beijing has suspended most October refined product export shipments, reinstating its previous export ban, with diesel stocks around 20 million barrels below pre-war levels and gasoline 9 million barrels short of its target, triggering a massive rally in Asian cracks.
White House Offers Last Tranche of SPR Release. The US Department of Energy offered the last SPR release of Trump’s 172-million-barrel emergency drawdown, offering 40 million barrels sour crude for November-December delivery, taking the countrywide total to 243 million barrels once delivered.
CER Settles Trans Mountain Toll Dispute. Canada's energy regulator approved Trans Mountain's new tolls, effective 1 January 2027, ending an 18-month dispute over TMX's C$34 billion cost overruns, while firm shippers committing at least 75,000 b/d over 20 years receive rates as low as $6.53 per barrel.
Seoul Rejects Trump’s Alaska LNG Pitch. The South Korean government has pushed back against Donald Trump’s claim that it committed to invest $54 billion in the Alaska LNG project as part of its $200-billion investment package, stating it will participate only if the project proves commercially viable.
Russia Extends Diesel-Export Ban, Hints at Its Lifting. Russia extended its diesel export ban through October, removing a market share near 10% of seaborne supply as winter demand rises, whilst Deputy Prime Minister Novak suggested Moscow could lift it soon due to an improving domestic supply outlook.
Gunvor Reinvents Itself, Moves to Singapore. Global trading firm Gunvor announced its rebranding as Centalion, redomiciling from Cyprus to Singapore after its December 2025 management buyout, with the move triggered by the US Treasury Department publicly labelling the firm a ‘Kremlin puppet’.
China Demands Anglo-Teck Supply Guarantees. China’s antitrust regulator is demanding guaranteed concentrate flows before approving the $54 billion Anglo-Teck merger, leveraging its regulatory veto as Chinese smelters— 60% of global refined output—face their worst feedstock shortage in decades.
JERA Takes Over Japan’s SPR Network. Japan’s largest power generation firm JERA has launched a new oil storage company to consolidate Tokyo’s SPR stocks, with the new company will assume operations at four national terminals holding 121 million barrels by April 2029, boosting the country’s SPR capabilities.
Chinese Lithium Plunges on Demand Fears. Chinese lithium carbonate futures fell 25% last month below ¥120,000 yuan ($17,900) per tonne, triggered by Beijing’s suspension of new battery factories amidst a worsening macroeconomic outlook, defying expectations of continued supply shortages ahead.
Panama Plans State JV to Restart Key Copper Mine. Panama's government will recommend restarting Cobre Panama through a state partnership with Canadian miner First Quantum (TSE:FM), following a 3-year hiatus at the giant mine that once produced 1% of global copper and 40% of the miner's revenue.
Saudi Pipeline Nears Full Strength. Pipeline flows through Saudi Arabia’s restarted East-West pipeline climbed to almost 6 million b/d, close to June-July levels, with around 4.5 million b/d available for exports from the Red Sea, restoring Saudi Arabia’s Hormuz bypass despite continued Houthi strikes.
China Coal Rally Hits Three-Year High. Chinese thermal coal prices jumped to ¥986 yuan per tonne ($147/mt) this week, extending an 11-week rally and gaining 25% since mid-July, following a drastic decline in Indonesian imports and continued mine security clampdowns across the state of Shanxi.
By Tom Kool for Oilprice.com
More Top Reads From Oilprice.com
UN Says Global Fuel Subsidies Could Top $1 Trillion
Brent Holds Above $102 as Gulf Export Rebound Offsets U.S. Military Moves
WTI Sinks Nearly 4% as EU Weighs Emergency Stockpile Release
Friday, October 02, 2026
The European diesel stock release, droned tankers in the Strait of Hormuz, and China reinstating its refined product export ban have all played their part in this week’s extremely volatile trading, with ICE Brent edging lower to $101 per barrel. That said, the physical oil market has been moving in the opposite direction, with Europe’s main physical benchmark Dated Brent (which should technically underpin ICE Brent’s moves) jumping above $120 per barrel. This suggests the physical market is a lot tighter than news headlines would care to admit.
OPEC+ Expected to Hold November Oil Targets Steady. OPEC+ is expected to keep November output targets unchanged at Sunday's meeting, as its core producers still pump 5 million b/d below pre-war levels despite August production rising by 630,000 b/d month-over-month to 25 million b/d.
Europe Moves Toward Massive Diesel Stock Release. EU governments are mulling the release of 50 million barrels—about 17% of EU emergency diesel inventories—over 20 days after US President Donald Trump threatened to introduce a diesel export ban, although final volumes are yet to be confirmed.
UN Warns Fuel Subsidies Could Exceed $1 Trillion. UNDP warned subsidies could exceed $1 trillion in 2026 as the US-Iran war, triple-digit oil prices and rising borrowing costs strain budgets, with government fuel relief shielding 130 million people from falling below the $6.85-a-day poverty line.
China Bans Fuel Exports Amidst Golden Week. Beijing has suspended most October refined product export shipments, reinstating its previous export ban, with diesel stocks around 20 million barrels below pre-war levels and gasoline 9 million barrels short of its target, triggering a massive rally in Asian cracks.
White House Offers Last Tranche of SPR Release. The US Department of Energy offered the last SPR release of Trump’s 172-million-barrel emergency drawdown, offering 40 million barrels sour crude for November-December delivery, taking the countrywide total to 243 million barrels once delivered.
CER Settles Trans Mountain Toll Dispute. Canada's energy regulator approved Trans Mountain's new tolls, effective 1 January 2027, ending an 18-month dispute over TMX's C$34 billion cost overruns, while firm shippers committing at least 75,000 b/d over 20 years receive rates as low as $6.53 per barrel.
Seoul Rejects Trump’s Alaska LNG Pitch. The South Korean government has pushed back against Donald Trump’s claim that it committed to invest $54 billion in the Alaska LNG project as part of its $200-billion investment package, stating it will participate only if the project proves commercially viable.
Russia Extends Diesel-Export Ban, Hints at Its Lifting. Russia extended its diesel export ban through October, removing a market share near 10% of seaborne supply as winter demand rises, whilst Deputy Prime Minister Novak suggested Moscow could lift it soon due to an improving domestic supply outlook.
Gunvor Reinvents Itself, Moves to Singapore. Global trading firm Gunvor announced its rebranding as Centalion, redomiciling from Cyprus to Singapore after its December 2025 management buyout, with the move triggered by the US Treasury Department publicly labelling the firm a ‘Kremlin puppet’.
China Demands Anglo-Teck Supply Guarantees. China’s antitrust regulator is demanding guaranteed concentrate flows before approving the $54 billion Anglo-Teck merger, leveraging its regulatory veto as Chinese smelters— 60% of global refined output—face their worst feedstock shortage in decades.
JERA Takes Over Japan’s SPR Network. Japan’s largest power generation firm JERA has launched a new oil storage company to consolidate Tokyo’s SPR stocks, with the new company will assume operations at four national terminals holding 121 million barrels by April 2029, boosting the country’s SPR capabilities.
Chinese Lithium Plunges on Demand Fears. Chinese lithium carbonate futures fell 25% last month below ¥120,000 yuan ($17,900) per tonne, triggered by Beijing’s suspension of new battery factories amidst a worsening macroeconomic outlook, defying expectations of continued supply shortages ahead.
Panama Plans State JV to Restart Key Copper Mine. Panama's government will recommend restarting Cobre Panama through a state partnership with Canadian miner First Quantum (TSE:FM), following a 3-year hiatus at the giant mine that once produced 1% of global copper and 40% of the miner's revenue.
Saudi Pipeline Nears Full Strength. Pipeline flows through Saudi Arabia’s restarted East-West pipeline climbed to almost 6 million b/d, close to June-July levels, with around 4.5 million b/d available for exports from the Red Sea, restoring Saudi Arabia’s Hormuz bypass despite continued Houthi strikes.
China Coal Rally Hits Three-Year High. Chinese thermal coal prices jumped to ¥986 yuan per tonne ($147/mt) this week, extending an 11-week rally and gaining 25% since mid-July, following a drastic decline in Indonesian imports and continued mine security clampdowns across the state of Shanxi.
By Tom Kool for Oilprice.com
More Top Reads From Oilprice.com
UN Says Global Fuel Subsidies Could Top $1 Trillion
Brent Holds Above $102 as Gulf Export Rebound Offsets U.S. Military Moves
WTI Sinks Nearly 4% as EU Weighs Emergency Stockpile Release
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