As investors focus on fragile Iran ceasefire talks, the global spot oil market is experiencing a different kind of storm. A panic to secure barrels, triggered by a supply disruption in the Strait of Hormuz, is spreading from Asia to Europe and the Atlantic Basin.
According to Bloomberg on Saturday, this week the North Sea spot crude market saw 40 buy orders but only 4 sell orders, with prices for near-term delivery briefly exceeding the historic high of $140 per barrel. Meanwhile, the futures market is moving in the opposite direction – Brent crude for June delivery fell 13% this week, closing at around $95 per barrel. The more than $30 price gap between the two markets reflects a deep rift between spot supply and paper expectations.
Sultan al Jaber, CEO of Abu Dhabi National Oil Company, posted on LinkedIn, &#34;The last cargoes to pass through the Strait of Hormuz before the conflict are arriving at their destinations. A 40-day disruption to global energy flows is becoming a reality.&#34;
Traders warn that even if negotiations make progress this weekend and the strait reopens, crude oil from the Persian Gulf will take weeks to reach refineries in Asia and Europe, making the supply gap difficult to close in the short term. Macquarie, however, warns that if the conflict extends into June, oil prices could surge past $200 per barrel.
<h2>Spot Market vs. Futures Market: Two Different Worlds</h2>
The world's most important spot crude benchmark, Dated Brent, briefly touched a historic peak of $144 per barrel this week, surpassing its 2008 high, even as futures prices remained well below historic records. As of Friday, Dated Brent had retreated to $126 per barrel, but still commanded a premium of over $30 to June futures.
This significant price gap is particularly extreme in the North Sea spot market. According to media reports, traders like Trafigura Group and Gunvor Group are bidding more than $22 above Dated Brent for North Sea crude for late April to early May delivery. Offers for Nigerian cargoes loading next month have already fetched premiums of up to $25 per barrel, compared to less than $3 before the Iran conflict erupted.
Neil Crosby, research head at Sparta Commodities AS, stated, &#34;Crude oil supply is short. The spot Brent market is in disarray, and prices have climbed too high. At this rate, European refineries may have to reduce their operating rates as early as next month.&#34;
<h2>Asian Refineries Scramble for Barrels Regardless of Price, US Exports Hit Record Highs</h2>
Asian countries, most dependent on the Strait of Hormuz, have extended their procurement reach across the globe. Japanese refineries have initiated a buying spree in the US, chartering smaller vessels to shorten transit times through the Panama Canal. Indian refineries have significantly increased their purchases of Venezuelan crude, with loadings in the first week of April approaching 6 million barrels, about double the amount in the same period in March.
Some Asian refinery traders stated that they are no longer focused on price, but are solely aiming to secure crude oil volumes wherever possible to ensure energy security.
In the US, President Trump tweeted this weekend that &#34;a lot&#34; of tankers were heading to the US to load crude oil. The premium for Houston-Midland WTI crude (MEH) over the US benchmark has risen to nearly $4 per barrel, about four times its pre-conflict level.
<h2>Refineries Under Pressure, Finished Oil Market Worsens</h2>
The extreme price difference between spot crude and futures is putting immense financial and operational pressure on refineries. While spot purchase costs far exceed the futures prices used for hedging, leading to seemingly healthy paper profits, actual cash flow management faces severe challenges.
Roberto Ulivieri, a consultant at Midhurst Downstream and former refining economist at Saudi Aramco, commented, &#34;This is a huge price risk management problem – the book profit looks good, but the actual cash flow from buying a cargo and deciding to refine it could be vastly different.&#34;
Some refineries have begun to withdraw from the market, directly resulting in reduced output and further tightening the supply of finished oil products. Currently, jet fuel and diesel prices have surged to historical or near-historical highs above $200 per barrel. Data from the US Energy Information Administration shows that US gasoline inventories have fallen to their lowest level in nearly 16 years.
<h2>&#34;Shockwave&#34; Spreads East to West, US May Be the Next Pressure Point</h2>
According to a JPMorgan analyst report on March 26, the four-week disruption of oil flow through the Strait of Hormuz will cause a &#34;sequential&#34; impact on global supply – starting in Asia, moving through Africa, then to Europe, and finally reaching the US. Most regions will face concentrated pressure in April. The Philippines has declared an energy emergency, and supply pressures began appearing in Africa in early April and in Europe in mid-April.
The global oil system is transitioning from a &#34;flow shock&#34; to an &#34;inventory depletion problem.&#34; Time, rather than just the volume of supply, has become the core variable driving market impact.
Macquarie commodity strategists noted in a client report that the market still anticipates Trump will soon announce a diplomatic victory. However, they also presented a scenario with about a 40% probability: if the conflict continues into June, oil prices could reach $200 per barrel, and US gasoline retail prices could jump to around $7 per gallon.
Amrita Sen, co-founder of Energy Aspects, warned, &#34;The spot market does not refer to social media; it continues to strengthen as supply disruptions spread from Asia to the Atlantic Basin. If futures prices fail to keep pace with the reality of the spot market, US exports may remain high as long as shipping capacity allows, until domestic refineries face crude oil shortages.&#34;

While the futures market is still betting on a ceasefire, spot crude has already spiraled out of control. In the North Sea market, 40 buy orders corresponded to only 4 sell orders, and prompt Brent crude briefly touched a historic peak of $144, a premium of over $30 to futures. Asian refineries are "buying oil regardless of price." Macquarie warns that if the conflict continues into June, oil prices could break $200

- The global spot oil market is experiencing turmoil due to supply disruptions from the Strait of Hormuz, with significant price discrepancies between spot and futures markets.  
- Spot Brent crude prices peaked at $144 per barrel despite futures falling to $95, highlighting a severe supply-demand imbalance.  
- Asian refineries are aggressively sourcing oil worldwide to secure supplies, with U.S. gasoline inventories reaching their lowest levels in nearly 16 years as the market braces for potential further price spikes.

Wallstreetcn

SPDR O&G Equip

iShares US Oil Equip & Svcs

BP p.l.c.

Pro Ultr Bloomberg Crude Oil

ISHRS S&P Glb Engy

VanEck Oil Services ETF

iShares US Oil & Gas Expl & Prod

United States Oil Fund LP

SPDR O&G Ex & Prd

Occidental Petroleum

HSPC

VG Energy

As Markets Focus on US-Iran Talks, an Oil Battle Unfolds: "Crude Oil Deficit Will Be Huge in Coming Weeks"