OilFlow morning brief — 2026-05-31

• Brent: $91.12
• Wti: $87.36
• Dubai: $89.12

CRUDE BENCHMARKS: Brent settled at $91.12/bbl (-$1.58), WTI at $87.36/bbl (-$1.54), Dubai at $89.12/bbl. The Brent-WTI spread holds near $3.76/bbl, supporting continued US export economics into Europe and Asia. Brent-Dubai EFS at roughly $2.00/bbl keeps arbitrage of Atlantic Basin barrels into Asia marginal but workable for select grades. Sentiment is decisively bearish, with headlines pointing to the biggest weekly collapse in two months and the largest one-month drop in six years, driven by US-Iran ceasefire extension speculation and expectations Saudi Arabia will cut OSPs again.

REFINED PRODUCTS: With no direct product prints in today's feed, cracks are inferred. ARA gasoil cracks remain supported by lean middle distillate inventories flagged in the "Shrinking Oil Inventories" narrative; Singapore gasoil 10ppm likely tracking $18–22/bbl over Dubai. USGC RBOB cracks soften as crude falls faster than product, a typical pattern into the demand shoulder. MOPS gasoline 92 holding firm on SE Asian demand; HSFO Singapore cracks remain deeply negative but stable on bunker pull.

FREIGHT: Flat rate matrix shows Saudi–India at $5.30/mt and Saudi–Pakistan at $4.60/mt, keeping AG–South Asia clean MR economics workable. UAE–East Africa lanes ($7.40–8.10/mt) remain the cheapest route into Mombasa/Dar versus West Africa–East Africa at $14.20/mt, which is effectively shut for arbitrage. Pakistan–Bangladesh at $6.10/mt and UAE–Bangladesh at $7.90/mt favor Karachi-origin re-exports if cargo availability permits. BDTI and BCTI prints unavailable today; Worldscale points implied stable to softer on weaker crude flat-price.

FX: PKR 278.69, INR 95.20, BDT 122.73, KES 129.43, LKR 326.27, IDR 17,861, MYR 3.97, AED 3.6725. Persistent weakness in PKR, LKR, and BDT continues to compress importer margins and is the dominant constraint on South Asian gasoil/jet pull despite lower flat price.

GEOPOLITICS: US-Iran ceasefire extension talks are the dominant bearish catalyst, removing a sizeable risk premium. Kansas Fed commentary warning the prior oil shock "might not be transitory" suggests policymakers see structural tightness underneath the selloff. Record US crude exports alongside SPR releases continue to cap Brent upside and pressure WAF differentials, particularly Nigerian and Angolan grades competing with WTI Midland into Rotterdam and Yeosu.

OUTLOOK: Bias is tactically bearish on ceasefire follow-through, but shrinking OECD stocks and impending Saudi OSP action argue against chasing shorts below $90 Brent. Watch for Aramco's June OSP release as the next pivot.

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

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