14 January 2025: 16:30 GMT
We’ve heard on the grapevine that the US state department was chinwagging with certain majors to discuss the market’s state ahead of unleashing sanctions. The US wanted to make sure that excess supply they see in the market was accurate, and taking out Russian and Iranian barrels would not lead to runaway oil prices. According to our source, the market perceived excess capacity to be sufficient to mitigate any significant shortage, with the usual overproducers filling the gaps (without naming any names – we know it’s all about omertà 😊). This advance warning helps explain the leaked embargo document. That same privileged information may have even led to early buying by some ahead of the official announcement of sanctions on Friday, when things went bananas. The moral hazard involved with canvassing entities with an innate commercial interest is clear 🤦♂️. As soon as the US state department is on the phone asking about the effect of sanctions, it’s time to get buying. Even so, the market feels like it’s in limbo, waiting to see what Trump has in store. Traders from China and the US we spoke to expect China and India to keep going for WAF and Latam grades until the incoming administration’s stance on sanctions becomes clear.
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
We invite you to read our reports, which will initially be published twice a day, reflecting closing values at 16:30 Singapore time (SGT) and at 16:30 London time (GMT/BST).
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