In this episode of the Trade with Conviction podcast, the Sparta team breaks down what's moving oil markets, not just in Iran, but Russian crude switching, gasoline contango and beyond

• Iran tensions boil while Europe doubles down on navigating with the new world order.
• Gasoline spreads swing on Dangote news, heavy selling in the Sing 92 window.
• Russian refinery attacks could be the start of a diesel resurgence just as swing arbs are closed into Europe.
• Spot AG crude diffs likely hit a ceiling on arb econs, unless Iran tail risk is realised.

In the latest episode of Trade with Conviction - live from IE Week in London - the team unpacks the growing disconnect in global energy markets: clear signs of a crude glut, yet spreads remain stubbornly backwardated as geopolitics and sanctions keep traders on edge.

Chapters:

(00:17) Oil glut vs geopolitical premium Is the surplus real? Heavy crude weakness, inventory builds, and why spreads refuse to break.

(10:38) How important are fundamentals today? The team discuss the decrease in importance fundamentals in the market and what’s driving these changes.

(14:12) Sanctions, trade deals, and headline risk Venezuela, Russia, India, and how bilateral politics are reshaping flows faster than fundamentals.

(19:40) Crude trade flows and WTI-Brent dislocation Dubai weakness, Americas supply growth, freight impact, and the marginal barrel shifting west.

(22:15) Distillates and jet: Freight, Russia, and export reshuffling US Gulf runs, diesel into Europe, jet reversals, and the gasoil East-West story.

(23:21) Gasoline and naphtha: Structural tightness vs geopolitical swings European refinery closures, EBOB structure, component flows, and naphtha’s sanction sensitivity.

(25:35) Trade ideas: Light-heavy spreads, refinery margins, and prompt gasoline structure Medium-term positioning and short-term conviction trades across crude and products.

Oil markets were driven by geopolitics this week, with Iran-related headlines triggering sharp swings in price. In this episode of Trade with Conviction, the team unpacks what the latest moves mean for the oil risk premium, before turning to crude markets and India’s buying patterns, Russian supply, and Middle East replacement flows.

Chapters

(00:31) Geopolitics and the oil risk premium Iran de-escalation headlines versus military incidents, India’s strategic role, and why crude remains headline-led into the weekend.

(09:57) Gasoline: contango, storage, and curve signals US inventory builds, Europe’s extreme carry, and how contango is supporting the prompt while pushing risk into Q2.

(20:16) Crude: India buying, Russian supply, and Middle East barrels Replacement economics, Saudi OSP expectations, Lunar New Year liquidity, and why AG grades are best positioned near term.

(28:23) Trade box: AG differentials bull case vs bear case Why spot diffs could firm, what caps the upside, and how China stockbuilding complicates the outlook.

(30:30) Fuel oil and middle distillates quickfire Venezuela’s impact on heavy molecules, Russian HSSA outlets, diesel arbs, and freight steering flows into Europe.

This week’s episode breaks down a market being pulled in two directions: geopolitical risk is driving flat price higher, while physical balances and inventories still point to a long market. The team covers escalating Iran risk, renewed Venezuela uncertainty, and how shifting global politics (including India’s positioning and a weaker dollar) are shaping sentiment. From there, they dive into key product moves across gasoline, naphtha, crude, and middle distillates, highlighting where physical markets are diverging from paper, how arbitrage windows are opening and closing, and what traders should watch as weather, outages, and refinery turnarounds reshape the near-term picture.

Chapters:

(00:35) Geopolitical macro corner: Iran, Venezuela, and the risk premium The team unpacks the latest flashpoints driving flat price, and why traders are once again at the mercy of headlines.

(04:53) Dollar weakness and the “floor” under crude A softer dollar supports prices, but the debate is whether it’s driven by growth optimism or loss of confidence.

(07:50) Gasoline: USGC tightness, Europe vs paper, and East-West pressure Gasoline spreads and cracks diverge across regions, with weather, blending economics, and Asian exports reshaping the map.

(14:39) Trade box: gasoline and naphtha positioning into Q2 Jorge shares two tactical ideas, plus the key risks that could challenge the setup.

(19:07) Crude: outages ease, physical weakens, and Brent looks stretched CPC returns, differentials soften, and the team discusses why the physical market isn’t fully confirming the flat price rally.

(26:08) Middle distillates: weather-driven spike and the short HOGO debate Heating demand and refinery constraints push cracks higher, but the trade hinges on timing, ARBs, and the next cold snap.

(31:18) Fuel oil quick fire: firmer tone but not a full bull case yet Some clearing flows support the market, but cracks and arb signals still suggest caution.

This episode steps back from day to day price noise to examine how geopolitics is increasingly shaping oil markets across crude and products. The team unpacks the easing but unresolved US EU trade tensions, Venezuela’s uncertain return to market, and why Iran remains a background risk. From there, the discussion moves into how these geopolitical risks are keeping crude structures tight despite looser balances, before diving into physical crude flows, Indian buying behaviour, blending economics, and the knock on effects for freight and refining margins. The episode rounds out with a detailed look at distillates, gasoline, and light ends, highlighting where recent price strength is weather driven, structural, or potentially vulnerable.

Chapters:

(00:40) Geopolitical headlines and market relief The team discusses Greenland, US EU tariff risks, and why markets are calmer but far from settled.

(07:59) Europe, alliances, and the return of great power competition A deeper look at shifting alliances, defence spending, and why security now matters more than efficiency.

(11:51) Crude structure, outages, and balance contradictions Why backwardation persists despite stock builds, with CPC outages and geopolitics in focus.

(16:43) Physical crude markets and Indian buying behaviour Indian refinery strategies, blending economics, and implications for AG and Atlantic Basin flows.

(23:33) Distillates outlook: diesel and jet regain momentum Cold weather, stock tightness, and why cracks and spreads are responding.

(28:08) Gasoline and light ends: contango and spring signals Gasoline storage economics, Dangote delays, and early warnings from Asia.

In this episode, the team breaks down how a fragile, two sided oil market is being shaped by geopolitics rather than fundamentals. With Venezuela, Iran and Russia all back in focus, they explore how sanctions risk, shifting trade flows and political uncertainty are keeping crude exposed to sharp risk rallies even as the broader balance points back towards oversupply. The conversation moves through crude and product markets, questioning whether current pricing truly reflects downside supply risk, and where traders should be most alert as seasonal and geopolitical forces collide.

The team kicks off 2026 by unpacking why flat price looks deceptively calm while physical markets are quietly shifting underneath. The discussion spans Venezuelan crude disruptions and heavy sour dislocations, Saudi OSPs and a softening Asian crude complex, tumbling freight reopening arbitrage routes, and tightening signals in gasoline and light ends. Across crude, gasoline, fuel oil and distillates, the episode focuses on how barrels are being displaced rather than lost, and why geography, logistics and benchmark behaviour matter more than headline noise right now.

Key Takeaways:

• Heavy sour barrels are being reshuffled globally, not removed, and the price signals reflect that
• Saudi OSP cuts and Chinese quota control are weighing on Asian crude benchmarks
• Freight has quietly flipped arbitrage economics across basins
• Gasoline structures have gone from no outlet to every outlet in a matter of weeks
• Fuel oil reacted fast to Venezuela headlines, but the fundamentals may not back it up
• Diesel looks weatherproof for now, despite cold snaps and low stocks

Chapters:

(01:10) Headlines check: Venezuela and geopolitical noise The team assesses why dramatic headlines have barely moved flat price and what really matters for physical flows.

(05:30) Heavy sour crude and displacement risks How Venezuelan barrels, Canadian crude and China’s teapots are reshaping the heavy sour balance without creating shortages.

(07:58) Asian crude under pressure: OSPs, Dubai and China quotas Saudi OSP cuts, a heavy Dubai structure, and why Beijing is tightening control over independent refiners.

(14:05) Gasoline and light ends: from nowhere to everywhere Why EBOB found a floor, how storage and blending economics flipped, and where the next support could come from.

(18:28) Fuel oil reaction versus reality High sulfur fuel oil cracks jump on headlines, but mass balance tells a different story.

(19:31) US diesel and heating oil signals Strong runs, warm weather and resupply flows keep distillates grounded despite tight regional stocks.

(21:02) What the desk is watching next Key benchmarks, spreads and regions to watch as geopolitics continues to test market conviction.

In the final episode of the year, the team breaks down the key macro and geopolitical drivers shaping Q1 2026 and what they mean for the physical barrel. They cut through Venezuela and Ukraine headlines, softening economic signals, and growing oversupply concerns, before moving product by product: distillates enter Q1 on a tighter footing, naphtha remains volatile but structurally supported by East West pull, gasoline shifts from European tightness into contango, and crude emerges as the core problem market unless headlines force a reset.

📚 Chapters

(01:27) Headlines: Venezuela, Ukraine, Europe, and softening data Enforcement risk, sanctions talk, and growth signals collide, with a debate on what actually moves price versus what fades.

(10:11) Distillates: 2025 rewind and Q1 diesel and jet outlook A volatile year in diesel and jet, then a constructive Q1 case built around stocks, winter risk, and supply constraints.

(16:41) Naphtha: two halves of 2025 and why East West stays central From early year strength to late year reshuffling, plus the structural demand pulls and key risks for Q1.

(25:00) Gasoline: Europe’s shift from tightness to contango A year of tightening supply then returning barrels, with attention on transatlantic flow signals and refinery reliability.

(31:20) Crude: oversupply, structure, and what could force a pivot Why balances imply pricing to store, how diffs and structure may adjust, and the potential rebalancing mechanisms to watch.