Episode 63: Sanctions rally! But the devil is in the detail

2025-10-23

In this episode of Trade with Conviction, hosts Rachel Williams, Philip Jones-Lux, and Neil discuss the seismic shifts in the oil market triggered by overnight news of U.S. sanctions on Rosneft and Lukoil, impacting Russian oil flows. They unpack the potential ramifications for global crude supply, particularly for India and China, while highlighting the uncertainty of President Trump's flip-flopping policies and their effect on market sentiment. The episode also touches on JODI data revealing surprising OECD stock builds, European refinery dynamics, and the strength in clean...

In this episode of Trade with Conviction, hosts Rachel Williams, Philip Jones-Lux, and Neil discuss the seismic shifts in the oil market triggered by overnight news of U.S. sanctions on Rosneft and Lukoil, impacting Russian oil flows. They unpack the potential ramifications for global crude supply, particularly for India and China, while highlighting the uncertainty of President Trump's flip-flopping policies and their effect on market sentiment. The episode also touches on JODI data revealing surprising OECD stock builds, European refinery dynamics, and the strength in clean product cracks, offering traders a snapshot of key market signals amidst geopolitical volatility.

Key Takeaways:

Risk rally has most legs in Dubai as Indian refiners plan to react immediately with trade deals on the line.
E/W spreads rally in favour of key short markets. Naphtha arbs East remain wide open.
European diesel now faces multiple risks to imports, at least on paper.
Gasoline supply risk is likely greater in the East, but prices rallied most in the West so far.

Chapters:

(00:47) Sanctions Shake-Up: Rosneft and Lukoil Fallout

Rachel and Neil react to overnight U.S. sanctions on Russian oil, exploring the immediate risk rally in oil assets and the potential for policy reversals.

(07:45) India's Crude Conundrum

The team discusses how Indian refiners, like Reliance, might navigate sanctions and shift to spot market purchases, potentially tightening global crude supply.

(12:25) JODI Data Dive: OECD Stock Insights

Neil highlights surprising stock builds in OECD regions, particularly in NGLs, and questions their relevance for crude price dynamics.

(15:42) European Refinery Rundown

Phil examines robust European refinery runs amidst capacity drops, with a focus on gasoline demand strength and Dangote’s shaky RFCC operations.

(20:32) Crude Arbitrage and Cushing Concerns

Neil breaks down shifting crude arbitrage opportunities, spotlighting TI’s high valuations and Cushing’s critically low stock levels.

(25:42) QuickFile Market Roundup

The team fire off their key takeaways on the market.

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