Vanda Insights

🇮🇷 Iranian Armed Forces: “We have information the US intends to attack again.” Warning: “If Iran is hit, say goodbye to the region’s oil & gas for a long time.”

WHY DID BRENT DROP TODAY? BRENT JUNE (COM6) FUTURE EXPIRY I see many people citing "June future expiration" as the reason for today's price drop without clarifying further. They may find it interesting that exactly the opposite happened on the expiration of the previous - May 2026 future (on March 31st). On the 2 graphs below: - green line is expiring contract (May 26 on the top one, June 26 on the bottom one) - white line is the front spread (May/June for the top and May/June for the bottom) - orange line is 2nd futures contract (June 26 on the top, July 26 on the bottom). Brent futures settlement is based on "Brent Index". Full description is in the document below ice.com/publicdocs/fut… But in broad terms the way the future settles is calculated by averaging 5 observations (volume weighted minute markers) - 2-3 minute periods around 10.30 , 12.30, 14.30, 16.30, 19.30 GMT/BST AND 3 computation methods. First two methods are based on the 2nd future contract (so this is what is averaged in the minute markers) and the third - on actual physical cargo trades - for the "First month" (i.e. the month of expiring contract - June 2026 today). There is also EFP involved, but it is a very small piece, so let us ignore it. This is important - the 2nd future contract plays the key role in settlement of the 1st contract on expiry. In the first two methods the value for the expiring future (June today) is implied by adding the front spread (June/July today) to the 2nd future (July). This is the Cash BFOETM (Brent/Forties/Oseberg/Ekofisk/Troll/WTI Midland) front month to second month spread. I described briefly the cash BFOETM forward in my note on Dated Brent below - x.com/ALikhodedov/st… ... Normally cash BFOETM is close to the futures price for the same month; however it may not hold when the contract is expiring. So if we go back to the graphs, we see that on expiry of May contract on 31st of March, 2nd contract (June 2026, i.e. COM6) was stable until 5.30pm (around 107). But the spread between 2 contracts started to explode after the first sampling period reaching $12 by 5.30pm. At the end of the day (17.30-19.30) COM6 dropped - so the spread with expiring COK6 increased further (since COK6 was 80% fixed at that time). Today the spread behaved in exactly the opposite way - it was very high before the first fixing ($9-12, although $12 was reached - it seems - during some liquidation at night time), then dropped to $6 and is not around $4. So what was going on - why did Brent drop today? I am not sure :), but I would decompose the problem into 2 parts 1) why did July (2nd contract - CON6) drop I like the theory linking it to yen carry trade unwind, suggested by @CRUDEOIL231, who I again strongly recommend to follow: x.com/CRUDEOIL231/st… 2)Why did the spread between June and July drop instead of going up like on previous expiry? I do not have a definitive answer, however here are some considerations - At the end of March physical market was getting stronger and stronger, with physical premiums ultimately reaching as much as $23+ for certain BFOETM grades during the first and 2nd week of April. So clearly there was strong demand for physical + as @OilCfd pointed out - it is quite possible that traders pushed the premiums higher in the Dated Brent window, similar to what reportedly happened with Dubai crude in March, when Total bought record amount of physical cargoes, achieving mind blowing physical fixings (allegedly making money on the derivatives, that were linked to those fixings). This time around Dated Brent premiums were weaker and were weakening for last couple of weeks - due to more WTI Midland coming from the US and Chinese buyers reselling the cargoes that they bought in March (possibly expecting to get crude from SPR) - again thanks to for color. I myself - after seeing what happened with June contract was thinking to take by June positions into expiry, but as the futures (COM6CON6) spread went above $7, while Dated Brent was not as strong as a month ago, decided not to bother and just rolled them into July .... I could be wrong - as I do not trade physical oil (although I learned quite a bit about it and briefly oversaw a small physical business a few years ago and have friends in the industry) - so if any actual physical traders care to chime in, it would be great.

🇹🇿Tanzania is about to finalize one of the largest energy deals in African history. Equinor, ExxonMobil, and Shell are meeting in Dar es Salaam this week for the final round of negotiations on a $42 billion LNG project. The hard part is already done... Commercial terms agreed and Tax framework settled. What's left is turning the handshake into legally binding contracts. 💡Tanzania sits on massive offshore natural gas reserves that have been waiting for development for over a decade. This project would build the infrastructure to liquefy that gas and export it globally creating one of Africa's largest LNG export hubs. Right now the world is desperately hunting for LNG supply outside the Gulf(Qatar mainly) Tanzania is about to enter that market with $42 billion of committed infrastructure and 3 of the most credible operators on earth behind it. Another node on the new energy map and one that bypasses Hormuz entirely.

🚨🇺🇸🇮🇷 Trump undercuts his own envoy on live television... Witkoff told Newsmax the U.S. offered Iran free enriched uranium for medical purposes. Trump's response? "Maybe it wasn't a very serious offer. I'm not giving them anything." His lead negotiator just had his proposal disowned by his own president on camera. Imagine being Witkoff watching this. Imagine being Iran trying to figure out who actually speaks for the United States. This is the challenge of negotiating with the Trump administration in one clip. The envoy offers. The president retracts. And everyone at the table has to guess which version is real. No wonder Iran keeps saying trust is at zero...

BREAKING: TRUMP OFFICIALLY TERMINATES OPERATION EPIC FURY For War Powers Resolution purposes the Trump administration have terminated the operation 1 day before the 60 day deadline that required congressional approval for war with Iran. Source: NBC News

NEW: A source close to Ghalibaf says the US is in final pre-strike positioning, with the US RC-135W compiling the target bank for strikes on Iran's oil infrastructure. Iran will retaliate with a "dual response" of direct missile strikes on Gulf energy facilities, US bases that supported the attack and full physical closure of the Strait of Hormuz with mines and missiles.

BREAKING: The UAE has banned its citizens from travelling to Iran, Lebanon and Iraq, and urged those already there to leave immediately and return home, the foreign ministry said, citing regional developments. 🔴 More on aljazeera.com

If you build two walls, one from NYC to the West Coast and another from LA to the East Coast, the total length will be 7,755 km, which is still about 1,000 km short of Iran’s total borders. Good luck blockading a country with those borders😁 P.S. For Pete Hegseth: 1 km = 0.62 mi

BREAKING: Israeli media reports that Israel is preparing to formally declare the collapse of Iran negotiations, with Channel 12 citing expectations of an official announcement in the coming hours. The report adds that the United States has given Israel authorization to proceed with strikes on Iranian energy facilities once the announcement is made, amid rising tensions and stalled diplomatic efforts. Israeli officials and U.S. sources have not publicly confirmed the details.

The world has witnessed Iran’s tolerance and conciliation. What is being done under the guise of a naval blockade is an extension of military operations against a nation paying the price for its resistance and independence. Continuation of this oppressive approach is intolerable.

🛑 Tomorrow, May 1, is the deadline for President Trump under the War Powers Resolution. 60 days after notifying Congress on March 2 about U.S. strikes on Iran — he must either end the conflict or formally request a 30-day extension for safe withdrawal. Congress is watching. Will it de-escalate or continue? #Iran #WarPowers #Trump

My comments to CNN as Brent climbed to $125 Thursday afternoon in Asia: Oil prices have “nowhere to go but up,” until the permanent reopening of the strait comes into view, said Vandana Hari, founder of energy market analysis firm Vanda Insights. “As of now, how and when that might happen is anybody’s guess,” she added, noting that another few weeks of stalemate would unlikely sit well with Trump. edition.cnn.com/2026/04/30/ene…

UAE’s OPEC exit could speed up post-Hormuz market normalisation -- My latest column in @energyconnects_ energyconnects.com/opinion/though…

"What 40 days of sustained strikes failed to achieve will not suddenly be accomplished through attacks in the Strait of Hormuz, high-profile assassinations, or even strikes on civilian infrastructure." -- Dennis Citrinowicz.

JUNE BRENT FUTURES AT ALMOST $124, ANOTHER 5% JUMP EARLY THU AFTER A 6% RALLY ON WED. It's the last trading day for the June contract, and most volume has already shifted to July. But still, the market is getting more edgy by the minute. Is a military escalation on the cards?

The Trump administration is 'asking other countries to join a new international coalition' to help open the Strait of Hormuz, according to Wall Street Journal report.

So, what is happening in the crude futures market? Simple : Traders are starting to discount the hope/expectation/sentiment shaped by de-escalatory head fakes from Washington to realign with the reality glaringly evident in the physical markets for weeks now.

A lot of attention on US pump prices. But it’s only the tip of the iceberg of systemic inflation already advancing across the globe. And the US will import it too.

Limits of Coercion in Dealing with Iran After more than forty days of conflict and weeks of unsuccessful negotiations, a central analytical gap persists in Washington’s approach: the assumption that the current Iranian regime can be coerced into capitulation. This assumption is fundamentally flawed. The Iranian leadership appears to believe it holds a relative advantage in a prolonged “war of economic attrition.” Under such conditions, additional economic pressure alone is unlikely to produce strategic surrender. The regime is both willing and structurally prepared to absorb significant economic hardship without altering its core policies. Likewise, the option of a broad, targeted military campaign carries substantial escalation risks while offering limited prospects of achieving decisive political outcomes. Rather than compelling compliance, such action would likely reinforce regime cohesion and intensify regional instability. The underlying issue is regime nature. The Islamic Republic has repeatedly demonstrated a willingness to endure high domestic costs, including significant harm to its own population, in pursuit of ideological and strategic objectives. Leadership rhetoric and behavior indicate a readiness to sustain, and even embrace, sacrifice for the preservation of the revolutionary system. As long as U.S. policy is guided by the expectation that increased pressure, economic or military, will force capitulation, it risks generating rising costs without achieving its intended outcomes. A reassessment of core assumptions is therefore essential. Without it, the United States is likely to face continued economic burdens, heightened regional tensions, and limited strategic gains. #IranWar‌

Fifty two Iranian vessels have crossed a US-imposed blockade of Iranian waters within a 72-hour period... middleeastmonitor.com/20260429-repor…