Brent tops $100 after Houthi attacks on two Saudi tankers; OPEC+ meets August 2
Brent traded at $100.69 a barrel by mid-morning Thursday, its first move above $100 in nearly two months, after an intraday high of $101.01. That is a gain of more than 7% in a single session. Any jobber holding fixed-price commitments written earlier this week is absorbing the spread until those contracts reprice.
The trigger was a claim by Iran-backed Houthi militants that they attacked two Saudi tankers in the Red Sea, per Bloomberg. The Red Sea has been carrying some Saudi barrels that would otherwise move through the Strait of Hormuz, which is already disrupted. WTI moved sharply higher with it, and the whole Brent forward curve lifted, so traders are pricing a longer disruption and not a one-day headline.
Rack and allocation
A crude move this size normally works through spot product and into rack postings within a day or two. Unbranded is where it lands first, since unbranded pricing tracks the spot market with no contract cushion under it. Branded supply could end up the cheaper side for a stretch, which flips the math some marketers have gotten used to.
Check where your supplier actually stands on terminal inventory before you commit volume to a customer. Allocation conversations tend to start when a run-up holds for more than a few days rather than on the first spike.
The August 2 meeting
Eight OPEC+ producers meet August 2 and are expected to approve another 188,000 bpd increase to their September target, Reuters reported Thursday. That would be the same size increase the group approved in each of the past three months. Saudi Arabia and Russia are among the eight.
Read the word "target" carefully. These voluntary cuts have existed largely on paper since the Iran war upended Gulf exports, so raising a target is not the same as putting barrels on the water. If the group approves the increase and physical output does not follow, the announcement may do very little to the price you pay at the rack.
India's July exports
India is on track to ship as much as 1.55 million bpd of light and middle distillates in July, according to Kpler data cited by Reuters columnist Clyde Russell. That is close to double the 866,000 bpd it exported in May, when the Hormuz crisis cut crude supply into Asia. Indian refining margins jumped with the re-escalation, which is what pulled the volume out.
Those barrels compete for the same Atlantic basin distillate demand that sets diesel economics here. More Indian product moving west could take some pressure off diesel cracks, though the crude side is pushing the other way right now.
What to watch
Whether the Houthi attacks continue past this week, what the eight producers actually announce August 2 and whether any real volume follows, and how fast unbranded racks in your markets close the gap to branded. If Red Sea traffic settles, crude could ease off triple digits as quickly as it got there.