WTI outpaces Brent above $100 on large US crude draw as Hormuz attacks lift supply risk
WTI futures ran up sharply for the week through Thursday night, and the stronger bid came after the EIA reported a large US crude draw. Brent held above $100 but could not add to its premium. For anyone buying at the rack, the US-grade strength feeds straight into your cost.
WTI over Brent
Several things drove the rally. Tanker attacks near the Strait of Hormuz, renewed attacks on Russian refineries, emergency stock releases, and fresh talk of legal oil moving on previously sanctioned vessels. The release and shipping headlines gave both sides of the trade something to work with. WTI got the stronger bid when the EIA draw landed.
WTI sets your domestic crude cost. When it leads Brent, US refiners' feedstock is pricing up faster than the global marker, and that works through to rack within a few days. Crude could ease if the strait stays open and the stock releases keep coming.
The fuel oil squeeze
High-sulfur fuel oil exports from the Middle East are running at least 800,000 tons a month below pre-war levels, Vitol's head of Asian operations said at an industry event. Russian supply has dropped too. Shipping demand for the fuel stays strong, which points to more supply pain ahead.
Diesel connects here. India just cut its diesel export tax, which could put more barrels on the water and take some edge off the global distillate crunch. For US jobbers watching ULSD basis, more Indian diesel export may be the relief valve, if it shows up.
770 million RINs
EPA proposed restoring the renewable fuel obligations lost to additional 2025 small refinery exemptions, and Clean Fuels Alliance America puts the gap at 770 million RINs. Vice President of Federal Affairs Kurt Kovarik said EPA wants to reallocate 100% of that difference. The timing is open. One approach splits the supplemental volume between 2026 and 2027; the other drops the full amount into 2027.
For blenders, that timing decides how heavy your 2026 RIN cost runs. Front-loading the volume could tighten the market sooner.
What to watch
Whether the Hormuz attacks and Russian refinery strikes keep a risk premium in WTI, or the emergency releases cap it. Watch EPA's choice between the two reallocation timelines, since it sets how much RIN demand lands in 2026 versus 2027. And watch whether India's tax cut actually moves diesel cargoes, because that is the nearest thing to relief on distillate supply right now.