Episode 72: Venezuela shocks the market: heavy sour pressure and the global crude reshuffle

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.