In an evaluation piece despatched to Rigzone on Monday specializing in oil market results of the battle within the Center East, Sparta Commodities CEO Felipe Elink Schuurman highlighted that “merchandise, not crude, are the actual story”.
“Whereas crude has grabbed headlines, the acute worth motion is in refined merchandise and notably center distillates,” Schuurman mentioned within the piece.
“Jet gas crack spreads in NW Europe have exceeded $90 per barrel, the very best since 2008. In Asia, the jet-diesel regrade went stratospheric,” he added.
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“European diesel futures surged as a lot as 23 % in a single session to two-year highs, outpacing positive factors in Brent crude. Singapore refining margins (gasoil crack) greater than doubled in a single week, reaching ranges final seen after Russia’s invasion of Ukraine,” he continued.
Schuurman acknowledged within the piece that three structural components clarify why merchandise are main crude.
“First, the crude displaced from Hormuz is predominantly medium-sour, the grade that produces the very best yield of center distillates (diesel, jet, kerosene),” he mentioned.
“Even when refiners can supply lighter Atlantic basin options (WTI, WAF, Guyana, Brazil), these grades produce extra gentle distillates (gasoline, naphtha), not the merchandise the world is wanting,” he added.
“Second, jet gas is structurally probably the most susceptible product. It requires specialised storage (not like diesel or gasoline), so strategic stockpiles are minimal. A disproportionate share of worldwide jet provide originated from Arabian Gulf refineries and was exported via Hormuz,” he famous.
“The market has discovered from June 2025 that jet cracks can stay elevated for weeks as soon as a real provide scarcity emerges,” he continued.
Explaining a 3rd “structural issue”, Schuurman highlighted that “roughly 1.7 million barrels per day of refined product exports from the Persian Gulf have been disrupted, together with vital flows of diesel, LPG, naphtha, and jet gas”.
“This immediately impacts refining margins all over the place outdoors the Gulf,” he famous.
Schuurman acknowledged within the evaluation piece that these crack spreads are the market’s sign.
“They inform refiners: hold operating at any price,” he identified.
“They inform customers: begin slicing again. And so they inform merchants: the actual dislocation will not be but on crude however on merchandise,” he added.
“Bear in mind we entered this battle with ample provides of crude (the well-known glut), however with a scarcity of worldwide refining capability,” he continued.
In an oil market press word despatched to Rigzone on Tuesday, Wooden Mackenzie highlighted that markets depending on exports have been notably uncovered throughout a number of areas.
“Europe faces particularly acute challenges,” Wooden Mackenzie mentioned.
“In 2025, Gulf refineries provided 60 % of Europe’s jet gas and 30 % of its diesel, volumes which are actually completely lower off,” it warned.
“Asia, which receives nearly all of Gulf crude exports, faces equally extreme stress. Chinese language, Indian, and different Asian patrons have been scrambling to safe various cargoes, driving up costs for West African and Latin American crude,” it added.
“Competitors between Europe and Asia for restricted non-Gulf provides is intensifying worth stress throughout all areas,” it continued.
“The prospect of utmost tightness in refined product markets is mirrored in super-high crack spreads. Jet-fuel cracks in NW Europe have traded at $100 per barrel (implying near $200 per barrel Brent) and diesel cracks $70 per barrel, 4 to 5 instances pre-war ranges,” Wooden Mackenzie warned.
An evaluation piece on the battle despatched to Rigzone by the S&P World workforce late Monday, which was penned by Jim Burkhard – who heads S&P World Power crude oil analysis – and the S&P World Power Crude Oil Markets workforce, estimated that the worldwide provide of crude oil and merchandise accessible to the market is down roughly 17 million barrels per day since February 27.
“Downstream and different oil infrastructure harm might probably restrict the tempo of restoration of oil flows … together with refined merchandise,” Burkhard warned within the piece.
The piece highlighted that Asia “is the epicenter of the oil disaster”, noting that, “from a global bodily provide perspective, the severity of the influence to this point is dependent upon direct publicity to Center East provide of crude oil and merchandise”.
“This implies the influence is most keenly felt in Asia, a area that buys 80 % of the 21 million barrels per day of oil exports that transited the Strait of Hormuz earlier than the battle,” the piece acknowledged.
“Crude oil delivered to Asian markets was already over $100 per barrel final week. Jet gas and diesel/gasoil costs, which hit file highs all over the world through the battle’s first week, are arguably underneath much more stress in Asia,” it added.
Burkhard identified within the piece that “it’s in Asia the place indicators of market duress are most evident”.
“Half of the crude oil processed in Asia in 2025 got here from the Center East Gulf area. However duress is spreading,” he warned.
“The longer the Strait of Hormuz stays successfully shut, the more severe the influence on bodily provides, inventories and costs – and never simply in Asia,” Burkhard went on to state.
To contact the creator, e-mail andreas.exarheas@rigzone.com
