OilFlow morning brief — 2026-05-02

• Brent: $108.17
• Wti: $101.94
• Dubai: $106.17

CRUDE BENCHMARKS: Brent settled at $108.17/bbl (-$2.23), WTI at $101.94 (-$3.13), and Dubai at $106.17. The Brent-Dubai spread compressed to roughly $2.00/bbl, a constructive signal for Asian and East African refiners pulling Middle Eastern barrels, while the Brent-WTI spread widened to ~$6.23/bbl, reflecting heavier selling pressure on US grades. Today's pullback follows an 8-day rally that pushed prints above $120 intraday earlier this cycle, with profit-taking triggered by news that Iran has submitted an updated peace proposal via Pakistani mediators. Despite the correction, the curve remains in a wartime risk-premium regime—Exxon's CEO publicly flagged that "the market hasn't seen the full impact" of the Iran conflict.

REFINED PRODUCTS & CORRIDORS: With Dubai trading at a narrow discount to Brent, Gulf-origin gasoil and jet differentials remain firm into Karachi and Mombasa. Pakistani buyers face a double squeeze: PKR at 279.01/USD keeps landed costs elevated, while Saudi-Pakistan freight at $4.60/mt and UAE-Pakistan at $5.20/mt remain the cheapest sourcing routes versus longer-haul alternatives. East Africa continues to lean on AG barrels—UAE-Kenya at $7.40/mt and UAE-Tanzania at $8.10/mt are economically preferable to West Africa-East Africa swings priced at $14.20/mt, which remain uncompetitive at current flat prices. KES at 129.13 and a relatively stable INR at 95.04 support continued Indian and Kenyan import pull.

FREIGHT & FX: Clean tanker rates on intra-Asia legs (Malaysia-Indonesia $3.80/mt) and Saudi-India ($5.30/mt) are supportive of arbitrage flows. Bangladesh imports via UAE ($7.90/mt) and Pakistan ($6.10/mt) remain workable, though BDT at 122.77 pressures BPC procurement budgets. IDR weakness (17,348) is a headwind for Pertamina's term-cargo economics.

GEOPOLITICS: The Iran file dominates. Reports that President Trump will be briefed on new Iran options keep tail risk elevated, even as the Pakistan-mediated proposal offered a near-term release valve. Any breakdown in mediation could re-open the path back above $120. Traders should not treat today's dip as directional—position sizing should reflect headline volatility rather than fundamentals, which remain tight on the supply side.

OUTLOOK: Expect choppy two-way trade with a $105-$115 Brent range until the Iran diplomatic track resolves. Physical premiums in the AG should hold firm; East African CFR differentials are likely to widen if freight tightens further. Lock in coverage on dips; avoid chasing rallies into headline spikes.

This market intelligence is for informational purposes only and does not constitute trading advice.

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