Group II base oil margins rise on lower feedstock costs

Spanish Market: Oil products
06/07/26

The US Group II base oil premiums continued to rise to declining feedstocks and competing fuel prices for the week ended 3 July.

US Group II base oil spot prices themselves were steady because market participants continue to gauge market uncertainty stemming from peace negotiations between the US and Iran.

Some US buyers are easing up on larger base oil purchases because of lower crude values. Others are continuing to build up inventory levels to maximize profit on the finished lubricant side and to prepare for the US Atlantic hurricane season.

Domestic sellers are uninterested in lowering prices while Group II availability remains lean and demand is holding relatively firm.

The Argus US domestic Group II N100 premium to four-week average low-sulphur vacuum gasoil (VGO) rose to its highest at $3.99/USG, up from its previous record of $3.86/USG. Margins from the same time frame in 2025 were $1.27/USG, a $2.72/USG discount from current levels.

Four-week average low-sulphur VGO prices declined because selling interest was low fluid catalytic cracker (FCC) margins fell. FCC margins are measured by a 70:30 split between conventional gasoline and ultra-low sulphur diesel (ULSD). Base oil premiums to diesel typically incentivize refiners to direct more VGO feedstock towards base oil production since both products utilize the same feedstock.

The Argus US domestic Group II N100 premium to four-week average US Gulf coast diesel increased to its record high at $3.15/USG, up from its previous high of $3.04/USG. Year-earlier margins were 93¢/USG, a $2.22/USG discount from current levels.

The four-week average low-sulphur VGO to four-week average WTI crude spread widened to $23.02/bl, up from $22.62/bl the week before. Four-week average low-sulphur VGO fell by 13¢/USG compared with four-week average WTI crude's 11¢/USG drop.

By Karly Lamm

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08/07/26

Mediterranean bitumen trade opens to Asia-Pacific

Singapore, 8 July (Argus) — A large bitumen cargo is heading from the Mediterranean to Asia-Pacific with economics for the trade now viable, and regional traders say more could follow. The 30,100 dwt Blacksmith , operated by trading firm Trafigura, loaded a 28,600t cargo from Aliaga (Izmir), Turkey on 17 June and is scheduled to arrive at Tanjung Langsat, Malaysia, around 10 July, according to vessel tracking data. Trafigura has storage at Tanjung Langsat, near Singapore. Importers in Asia-Pacific said the Europe-Asia arbitrage is only feasible for the largest tankers and cargo sizes. Recent oil price volatility could make the trade risky, according to traders, but there is no sign yet of the price spread between Singapore and the Mediterranean closing. Some traders expect further cargoes to make the route. Singapore prices were $184/t above those of the Argus Mediterranean bitumen index on a fob basis on 3 July. The spread was around $10/t in favour of Singapore at the start of June. Singapore prices continued to rise slightly this week, supported by higher bids and buying indications along with continued tight supply. The daily fob Singapore ABX 1 assessment hit $610/t on 8 July. Trafigura bid for a 4,000t cargo loading 23-27 July at $615/t fob Singapore on 8 July, including demurrage, on the Argus Open Markets (AOM) platform, but attracted no selling interest. The bid stipulated SRC and ExxonMobil supply only, and is understood to be part of a requirement to meet supply to Australia. Longer lead times for shipping cargoes from Europe to Asia-Pacific have kept traders concerned that Asian prices could fall by the time the cargo arrives at its destination. But Singapore supply is tight, which has supported export prices. July-loading supply is no longer widely available, and August-loading supply remains tight. At least one refiner has reported bitumen output disruptions because of feedstock issues. Crude slates suitable for bitumen production may take longer to reach Singapore, keeping supplies limited for now, market participants said. Most have refrained from fresh offers. Mediterranean bitumen supply has also been tight in recent weeks, particularly from Greece, as refiners grapple with the continued loss of much Mideast Gulf crude supply that is good for bitumen production. Greek refiner Motor Oil Hellas (MOH) has switched to lighter crudes and produced more jet fuel and diesel and less heavy products like bitumen. Mediterranean bitumen prices have been pulled lower by a fall in high-sulphur fuel oil (HSFO) values since early June, even with some firming of the differentials to HSFO at which bitumen cargoes trade. Singapore cargoes trade at outright values and historically have been more disconnected from HSFO moves. By Chloe Choo and Jonathan Weston Mediterranean v Singapore bitumen $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Oil futures: WTI settles above $70/bl

07/07/26

Oil futures: WTI settles above $70/bl

Houston, 7 July (Argus) — US benchmark WTI crude futures rose today after an attack on an LNG tanker raised concerns about the pace of a return to normal shipping through the strait of Hormuz. August Nymex WTI rose by $1.89/bl to $70.44/bl while September Ice Brent rose by $2.17/bl to $74.16/bl. The September Brent-September WTI spread widened by 39¢/bl to $3.82/bl. WTI at the Magellan East Houston terminal was discussed at a prompt 5-15¢/bl premium bid-ask spread to the Cushing benchmark at 3pm ET, according to the Argus Crude Market Ticker, compared with Monday's 10¢/bl volume-weighted average premium. Prices rose further above $72/bl in after-hours trade Tuesday after US sanctions enforcers revoked authorization allowing purchases of Iranian crude and refined products, as the US-Iran interim deal signed last month began to come apart. An LNG tanker was hit on its port side while traveling southbound through the strait of Hormuz, triggering a fire on board. The attack occurred about eight nautical miles (15 km) east of Limah, Oman, according to the UK Maritime Trade Operations. Vessel transits using the Hormuz shipping lane near the Omani coast while broadcasting AIS slowed to a near halt following the strike. In addition, at least one laden and two empty LNG carriers have diverted away from the strait after the attack. Saudi Arabia's state-controlled Saudi Aramco has again asked its customers in Asia-Pacific to submit volume requests for August-loading term crude exports from Ras Tanura, after the recent increase in traffic through the strait of Hormuz raised the possibility of a revival of such exports. State-owned QatarEnergy appears to have recently offered prompt supplies of Qatari condensate in the spot market, marking the first such offers since the start of the US-Iran conflict. Elsewhere, the Cuban government is investigating the cause of another nationwide blackout, state-run power utility UNE said. Blackouts have become more frequent and longer in Cuba because of reduced access to imported fuel since the US has tightened an economic blockade of the island of 12mn people. The US imposed a blockade in January on Cuban crude and fuel imports from main supplier Venezuela following its 3 January overthrow of Venezuela's president, Nicolas Maduro, Cuba's foremost backer. In the US, the Energy Information Administration said Tuesday that the WTI benchmark will slide steadily to reach below $60/bl by the end of 2027 as the return of Middle East production puts the global market back into an oversupplied scenario. The agency also sharply lowered its 2026-2027 gasoline and diesel price forecasts. Nymex RBOB fell by 4.94¢/USG to $2.9539/USG while Nymex ultra-low sulphur diesel rose by 0.33¢/USG to $3.3017/USG. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

US revokes authorization to buy Iranian oil

07/07/26

US revokes authorization to buy Iranian oil

Washington, 7 July (Argus) — US sanctions enforcers on Tuesday revoked an authorization allowing purchases of Iranian crude and refined products, as the US-Iran interim deal signed last month begins to fracture. The US will not allow purchases of Iranian crude, oil products and petrochemicals effective immediately, according to a license issued Tuesday by the Treasury Department's Office of Foreign Assets Control (OFAC). Buyers that contracted for Iranian oil since OFAC allowed such sales on 22 June will have until 17 July to wind down Iran-related transactions. All funds due to be paid to Tehran will have to be deposited in escrow accounts, according to the terms of the updated OFAC license. The license replaces the authorization issued last month, which was due to expire on 21 August. The US and Iran signed an interim deal on 18 June promising to refrain from force and to fully reopen the strait of Hormuz, but the countries' militaries have subsequently clashed intermittently over Tehran's continued assertion of control over the critical Mideast Gulf waterway. Iran's forces on Monday resumed indiscriminate attacks against vessels attempting passage through Hormuz via a route skirting Oman's coast. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

End of fuel tax cut curbs German products demand

06/07/26

End of fuel tax cut curbs German products demand

Hamburg, 6 July (Argus) — The expiry of Germany's temporary fuel tax reduction at the end of June sharply reduced nationwide demand in the week ending 3 July. Most consumers and filling stations built stocks ahead of the return to regular tax rates on 1 July. The government had lowered rates from early May by €14.04/100 l to ease the effects of the sharp price surge caused by US-Iran war. Diesel and gasoline sales volumes reported to Argus fell steeply, after stockbuilding drove spot trade higher in the previous week. Market participants are now drawing on inventories before stepping back into the spot market at July's higher price levels. National average prices for diesel and gasoline remain well above late-February pre-war levels, even after the tax cut ended. By Johannes Guhlke Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Australia's gasoil, jet stocks rise, EV sales increase

06/07/26

Australia's gasoil, jet stocks rise, EV sales increase

Sydney, 6 July (Argus) — Australia's gasoline stocks have dipped on the week to 30 July but gasoil and jet fuel levels have increased, as electric vehicle (EV) sales rose for the month of June, according to Australia's federal government. Australia's fuel importers held stocks of 22.2mn bl of gasoil, 11.1mn bl of gasoline and 5.9mn bl of jet fuel of stocks in-country and within Australia's exclusive economic zone on 30 June, Australia's energy minister Chris Bowen said on 4 July, or about 38 days of gasoil supply, 41 days of gasoline and 34 days of jet fuel. This is one more day's supply of gasoil than a week earlier, three days fewer of gasoline and five more days' worth of jet fuel over the same period. EV sales have soared during June, with 23.4pc of purchases battery EVs, according to the Federal Chamber of Automotive Industries (FCAI). This compares FCAI data showing just 8.3pc of new vehicle sales comprising battery EVs last year . China is now the leading source of Australia's total new vehicle sales with 35.5pc of sales, followed by Japan with 20.7pc and Thailand with 17.8pc. Australia's temporary cut to fuel excise and the heavy vehicle road user charge was rolled back by half but extended by a month , effective 1 July. The temporary discount both taxes has been lowered to 16A¢/litre, (11¢/litre) raising the effective excise rate to 36.6A¢/litre until 2 August. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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Group II base oil margins rise on lower feedstock costs

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