Attacks on US troops and Saudi energy infrastructure heighten risks of prolonged disruptions, tightening refined product markets.
Brent crude rebounded more than 4% after a three-day sell-off, driven by escalating tensions in the Persian Gulf. The US intercepted attacks on its troops, while Saudi Arabia thwarted drone strikes targeting its energy infrastructure, raising supply disruption fears.
Reports indicate the 400k b/d Jazan refinery in Saudi Arabia may have shut following Houthi attacks over the weekend. Tightness in middle distillates is evident, with the ICE gasoil crack breaking above $70/bbl and the prompt timespread surging to a backwardation of over $80/bbl.
OPEC+ plans to unwind voluntary production cuts, though analysts maintain a broadly well-supplied market outlook through 2027. However, persistent geopolitical risks could further strain supply chains.