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2026-05-26 18:43:36
[Asian Middle Distillate Oils Rebound Amid Renewed Uncertainty Over Iran Peace Agreement; Spot Trading Light] ⑴ Asian diesel and jet fuel markets rebounded on Tuesday as uncertainty resurfaced regarding a potential peace agreement between the US and Iran. Spot trading was generally light, while refinery crack spreads rose above $48 per barrel, reversing the previous day's weakness. ⑵ The spot market structure for both diesel and jet fuel shifted to a deeper premium. The discount between jet fuel and diesel widened, closing at a discount of $2.05 per barrel. No diesel or jet fuel transactions were concluded in the Singapore spot market on Tuesday. ⑶ Brent crude rose 3% on Tuesday as the US military strikes against Iran increased uncertainty about an immediate ceasefire agreement and the reopening of the Strait of Hormuz. ⑷ The middle distillate oil market is caught between renewed geopolitical risk premiums and weak fundamentals. On the one hand, cooling expectations of a peace agreement pushed up oil prices and crack spreads; on the other hand, Indian government data showed that refinery crude oil processing volumes fell 8.9% month-on-month to 5.23 million barrels per day in April, indicating that regional demand may be weakening. (5) Thin spot trading reflects the wait-and-see attitude of end users. Market participants are unwilling to establish large positions given the uncertain prospects of negotiations, and future direction will highly depend on the next development of the US-Iran situation and when actual energy flows will return to normal.
