Beacon brief: Friday, October 23, 2026

The European Parliament voted 341 to 225, with 6 abstentions, on October 22 to give importers of crude, gas and coal until May 31, 2031 to show that contracts signed or renewed since August 4, 2024 cover only fuel under monitoring, reporting and verification rules equivalent to the EU's, per the Parliament. Those obligations are due from January 1, 2027 under current law, and the Commission proposed a one-year delay on October 14. MEPs also moved first methane-intensity reporting to August 5, 2031 and gave EU operators until February 2030 for verified reports on operated assets, but kept the original schedule for fuel from sanctioned countries. Member state ambassadors failed to agree their own position on October 21, per EUobserver, and Reuters reports France and the United States, Europe's largest LNG supplier, pressed for a longer delay.^1,3,2

US refineries ran above 95 percent of capacity on average from May through September, the highest for those months since 1998 and against a long-run May-to-September average of 92 percent, the EIA said on October 22, per Reuters. Utilization in the first three weeks of October fell from summer highs but stayed above the 2021-2025 seasonal average, and total output is the highest since 2019 even though capacity is down 4 percent since then. The EIA tied the runs to tight global distillate supply and US diesel export demand. Valero, the first refiner to report, posted a third-quarter refining margin of $39.24 a barrel against $13.14 a year earlier, per Reuters.^7,8

Gulf oil exports excluding Iran recovered to more than 81 percent of pre-war levels in September, but more than 1 million b/d, about 7.5 percent of regional flows, moved by ship-to-ship transfer against almost none before the war, per a Citi note reported by Reuters. VLCC rates on the Gulf-China route neared $250 a tonne, about $35 a barrel. Aramco CEO Amin Nasser said on October 22 that Saudi Arabia and Aramco want to partner with other countries to expand strategic stockpiles and are studying export alternatives to the Strait of Hormuz via Bab el-Mandeb and Suez, without detail, per Reuters. Saudi output recovered to about 8 million b/d in September from below 7 million for most of the war's first six months, per the IEA. Brent was up 3.3 percent at $112.37 by 9:15 a.m. New York time on October 22, per CNBC, which cited a New York Times report that US and Israeli militaries have drawn up plans for strikes on Iran after next month's US midterm elections.^10,9,11

QatarEnergy signed two long-term agreements on October 22 to buy up to 4 million tonnes a year of LNG free on board from Cheniere, 2 million from Sabine Pass in Louisiana and 2 million from Corpus Christi in Texas, with deliveries from 2031 through 2054, per QatarEnergy and Cheniere. Pricing is indexed to Henry Hub plus a fixed fee. One million tonnes a year of the Sabine Pass volume depends on a positive final investment decision on the first phase of the Sabine Pass expansion, a single train of over 6 million tonnes a year for which Bechtel holds a lump-sum EPC contract signed in May; the full expansion could take the terminal above 50 million tonnes a year, per Cheniere. QatarEnergy CEO Saad al-Kaabi said the deal diversifies its portfolio.^4,5,6