MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News June 15:

Updated at 4:30 PM ET 

HEADLINES:

— Analysis: Strait of Hormuz Reopening – Key Takeaways

— Circularity Turns Dairy Biogas into Jet Fuel

— PNW Sub Oct Reg Basis Falls 5cts as Supply Concerns Ease

— Midwest CBOB Basis Slides as Market Rolls into New Cycle

— Big Spring Refinery Reports North Flare Emissions Event

NEWS:

Analysis: Strait of Hormuz Reopening – Key Takeaways

Oil futures slumped to a three-month low Monday (6/15) morning after the U.S. and Iran announced they had agreed to an interim deal to end the war and reopen the Strait of Hormuz. Here are some key takeaways of what an imminent resumption of oil flows might mean.

Immediate but Short-lived Relief

Around 300 laden tankers are ready to traverse the waterway, and about as many empty tankers are waiting on the other side and could load within days. After this initial wave, however, export flows will be slow to return to pre-war levels given a multitude of logistical constraints, from tanker availability and voyage times to damaged infrastructure and curbed production. Before the blockade, around 140 commercial ships transited the chokepoint on average every day, including tankers transporting some 15 million bpd of crude oil and 5 million bpd of refined products.

Timing Is Critical

The International Energy Agency has warned that inventories could hit a “red zone” by July-August should flows not be restored soon. When and at what speed exports return will be crucial to gauge shortage risks. A restart this weekend, as suggested by the White House, would come just in time to mitigate the worst outcomes. Another month of disrupted flows, in contrast, could lead inventories in some regions near operationally necessary minimums and jeopardize fuel supply security. The U.S. Energy Information Administration estimates commercial oil and fuel inventories to fall to 2.56 billion bbl by the end of June and 2.27 billion bbl by the end of 2026, compared to 2.82 billion bbl at the beginning of the year. In the U.S., total petroleum inventories have recently plummeted to their lowest in more than two decades.

Full Recovery Will Take Months

More than 10 million bpd of crude oil production has been forced offline since the beginning of the war. Many wells will require heavy maintenance and months of operating before approaching pre-war output levels. Energy infrastructure which sustained damage during the war will also require repairs, including oil fields, pipelines, export terminals, and processing plants. At least two-thirds of curbed Middle Eastern supply could return within three months, but some production is likely permanently lost.

Bottom Line

Even an immediate reopening will leave the global oil market in a deficit for months to come, the size of which will depend on how quickly supply chains can be restored and how much demand has been permanently destroyed. For the U.S., this means that while exports may ease off their record highs, they are bound to continue at an elevated rate, with strong international demand drawing down inventories and adding a premium to otherwise softening fuel prices for domestic buyers.

Circularity Turns Dairy Biogas into Jet Fuel

Circularity Fuels announced Monday (6/15) it has completed the world’s first end-to-end conversion of raw agricultural biogas into sustainable aviation fuel (SAF).

 Over a six-month pilot, the company drew biogas directly from a California dairy’s manure digester and produced drop-in jet fuel meeting ASTM D7566 Annex A1 specifications — the standard required for commercial aviation use, the company stated.

The company expects to break ground on its first commercial site in 2027, targeting agricultural biogas resources across the United States, Latin America, and Europe.

The pilot host, a dairy of more than 5,000 head near Madera, California, currently vents nearly all of its biogas to the atmosphere despite sitting in the heart of the country’s largest dairy region.

Circularity’s two-reactor system ran on raw biogas — roughly 65% methane and 35% CO₂ — drawn straight from the farm’s digester and produced finished jet fuel blendable at up to 50% with conventional Jet-A for immediate commercial use, according to the company.

The company says commercial-scale deployment can be achieved for under $100,000 bpd of installed capacity — roughly one-fifth the capital cost of SAF plants currently under construction in Europe.

The fuel also qualifies for the EPA’s Renewable Fuel Standard and California’s Low Carbon Fuel Standard. Global SAF production currently meets less than 1% of demand, and today’s dominant feedstock — used cooking oil, the majority of which is imported from China — offers limited scale and does little to address energy security concerns.

PNW Sub Oct Reg Basis Falls 5cts as Supply Concerns Ease

Pacific Northwest sub octane regular gasoline basis weakened Monday (6/15), falling by 5cts on softer supply conditions and with the absence of recent refinery flaring events.

An offer was heard in the market at an 18cts premium to July NYMEX RBOB futures, bringing the Pacific Northwest sub octane basis to a last indication of a 17.5cts premium, down 5cts from the prior session. The product was last seen trading at this level on October 17, 2025, according to DTN data.

No significant refinery flaring events or unplanned unit outages have been reported recently at major U.S. West Coast refining facilities, reducing concerns over potential supply disruptions that have supported gasoline basis values in recent months.

The lower basis reflects improving market sentiment around regional gasoline supply availability. With no fresh operational issues reported at West Coast refineries, traders appeared less concerned about near-term supply risks, pressuring Pacific Northwest  gasoline differentials lower.

Midwest CBOB Basis Slides as Market Rolls into New Cycle

Chicago CBOB basis weakened Monday (6/15), with declines extending across Wolverine and Buckeye delivery points against July NYMEX RBOB futures as the market moved into a new trading cycle (C3).

Chicago CBOB basis for West Shore was assessed at a 13.50cts discount to July NYMEX RBOB futures, weakening 18.50cts from the prior session, according to DTN Energy data. Buckeye CBOB basis was assessed at a 10cts discount, down 11cts from the previous day, while Wolverine CBOB basis was also assessed at a 10cts discount, weakening 15cts on the session.

“After the big drop in RBOB futures today and the uptrend we saw in CBOB basis over the last two sessions, expectations were for basis to continue moving higher,” a source familiar with Midwest refined product trading said. “Instead, with the start of the new cycle, refiners appeared to move early to place barrels and became more aggressive sellers, which is not unusual during the initial days of a new cycle.”

Latest EIA data showed Midwest gasoline inventories increased by 1.1 million bbl to 44.4 million bbl during the week ended June 5, recovering from multi-year lows recorded the prior week. Even with the build, PADD 2 gasoline inventories remained 3 million bbl below the same week last year.

In futures markets, July RBOB gasoline settled at $2.9472 gallon, down 8.43cts, or 2.83%, on the session.

The move lower in Midwest gasoline basis suggests the cycle reset added prompt supply into the market, offsetting support that normally comes from a weaker futures market.

Big Spring Refinery Reports North Flare Emissions Event

Delek US Holdings reported Saturday (6/14) an emissions event at the North Flare of its 75,000 bpd Big Spring Refinery in Big Spring, Texas, according to a filing with the Texas Commission on Environmental Quality.

The event began on Saturday (6/14) at 9:00 a.m. and ended at 2:00 p.m. CT, the filing said.

The emissions were tied to an equipment malfunction that resulted in sulfur dioxide emissions exceeding reportable quantity limits. Sulfur dioxide emissions were estimated at 1,100 pounds.

Operators adjusted unit operations to minimize emissions to the extent possible, according to the filing.

The refinery primarily produces gasoline, diesel, and jet fuel.

DTN reached out to Delek US for additional details but did not get an immediate response.