Saket Vemprala, who covers European gasoline at General Index, was joined by Inês Gonçalves, Lead Research Analyst for Gasoline at Kpler. They discussed the sharp moves in Northwest European gasoline prices at the start of September. The session was recorded in mid-September 2026, ahead of the switch from summer-grade to winter-grade gasoline.
Record premiums on Eurobob barges
Eurobob barges trade as a differential to the next month’s swap. September barges usually trade at a premium to the October swap, because October is the first full month of winter grade, which is normally cheaper. In early September that premium reached more than $300/mt in some trades. That is the highest level in more than a decade of GX data.
GX trade data showed that buyers drove the move. In the first days of September, buyers had to raise their bids by more than $100/mt from their opening levels before trades were concluded. By the second week this had reversed, and bids and offers moved by similar amounts to reach a deal.
The swaps curve tightened as well. The backwardation between the first and sixth month was the steepest since the first half of 2022, after Russia’s invasion of Ukraine. This time the M1/M2 and M1/M3 spreads widened along with it. With backwardation of around $10/mt per day, holding product in tank was uneconomic. Saket said blenders moved to just-in-time buying, purchasing in the spot market as close as possible to when they needed product.
Among blending components, the largest gains were in high-octane grades such as reformate and TX blend. A wider spread between light and heavy cat cracked spirit pointed to some early winter-grade blending. Light virgin naphtha and raffinate showed little movement, which reflected weak demand for West African export blends. Premiums and structure had eased significantly by the time of recording, although the market remained tight.
The fundamentals behind the move
Inês said Northwest Europe usually lags the global gasoline market at the end of summer. Kpler data showed the regional balance tightening by 100,000 b/d from August to September, while the global balance lengthened by more than 400,000 b/d. High margins led refiners to delay maintenance where they could, so the autumn season will be light. Kpler expects that work to move into spring, which would tighten supply at the start of the second quarter of 2027. Since the Middle East conflict began, refiners have also shifted output toward middle distillates, mostly jet fuel in Northwest Europe. Middle distillate yields are up about 2% from a year earlier, while gasoline yields have fallen slightly.
Low water on the Rhine was the immediate trigger. Water levels had been falling since the second quarter, restricting barge traffic between ARA and inland markets in Germany and Switzerland. A brief recovery at the end of August released pent-up demand from inland buyers. Strong prices in the Mediterranean also opened the arbitrage from Northwest Europe to the Med. The Med relies on Russian and Middle Eastern supply, and both have fallen.
The traditional export routes from Northwest Europe have weakened. US refiners ran hard through the summer, and RVP waivers, a Jones Act waiver, and higher ethanol blending reduced US demand for European barrels. In West Africa, the Dangote refinery is supplying more of the regional market, and Nigerian demand has fallen since fuel subsidies were removed. Saket noted that one Scandinavian refiner that normally supplies ARA had sent cargoes to Africa instead.
Outlook
Kpler expects gasoline cracks to fall into the winter but stay above seasonal norms. It expects the Northwest European balance in 2027 to be tighter than in 2025 or 2026. Refinery runs are forecast to fall by more than 1% next year, and refiners are expected to keep favoring middle distillates. Inês said high prices have also sped up the shift toward hybrid and electric vehicles and higher ethanol blends. Saket said E10 would only become the standard spot grade if Germany, which still mostly uses E5, adopted it more widely.
Saket also noted that 11 ICE-listed contracts now settle on GX Eurobob assessments: three for the E10 market and eight for the E5 market.
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