Brent crude prices have surged, driven by heightened risk premia linked to escalating tensions between the US and Iran, inflammatory rhetoric from former President Trump, and blockade threats from Houthi forces, according to FX Street. These geopolitical developments have increased market uncertainty, pushing crude prices higher.
At the same time, crack spreads in Asia and the US have outperformed as supplies of refined petroleum products remain tighter relative to crude oil. This supply-demand imbalance is supporting stronger margins for refiners in these regions, FX Street reported.
For Japanese markets, where energy imports are critical, these dynamics signal potential volatility in fuel costs, emphasizing the importance of monitoring geopolitical risks alongside refining sector trends.