Argus reported on 24 April that EU gasoil imports had run 695kbd, down 38% month-on-month and the lowest since its tracking began in 2016, after the Hormuz disruption stripped roughly a fifth of Europe's Gulf sourcing 1. The ICE Gasoil crack held near $54/bbl through the period 2, and US distillates sat 9% below the five-year average in the week to 15 May 3, deeper than the deficit behind the IEA's 246mb two-month draw . With the flat price down $14 and the physical deficit unchanged, the crack mechanically widens.
The arbitrage sits exactly here. BP Rotterdam's roughly 400kbd is still dark on both crude units , pulling NWE cracking capacity out at the exact moment the import gap opened. The two shocks compound rather than add: domestic refining withdrew just as the import channel closed, so the deficit cannot be covered from European runs alone, and a flat-price fall does not touch that physical gap.
The trade is to hold gasoil as the risk-adjusted long against crude. The flat price carries the deflating geopolitical premium; the crack carries the 695kbd of imports Europe lost. If a Hormuz-normalisation headline brings no actual flow inside 30 days, the backwardation re-steepens, because the barrels still have to arrive and none have yet.
