"We Were Faced With An Unbelievable Shock."
- 3.04.2026, 12:59
The cost of current Brent crude supplies has reached its highest since 2008.
While Brent futures prices have generally held in the $100-112 per barrel range for three weeks now, actual physical deliveries with immediate shipment are significantly more expensive. This is a consequence of the significant shortage of oil at the moment and the expectation of de-escalation in the Middle East in a month or two, when deliveries under futures contracts are due. The cost of Dated Brent crude oil batches now being traded and shipped in the North Sea has reached $141.37, Bloomberg reported, citing S& P Global, which publishes the prices.
This is not only above levels seen after Russia invaded Ukraine in 2022, but also the highest since July 2008, when oil prices hit historic peaks just before the full-blown financial crisis began.
Before the Iran war, Gulf countries supplied the world market with about 20 million barrels of oil and refined products per day. The reduction in exports as a result of the closure of the Strait of Hormuz has been partially offset by Saudi Arabia, which has diverted oil by pipeline to the Red Sea and brought supplies to 7 million bpd, and the UAE, which pumps 1.5 million bpd by pipeline outside the Persian Gulf. But more than half of pre-war exports remain out of reach.
Traders are therefore buying up oil wherever they can. In the North Sea, according to S& P Global, batches of Dated Brent have been purchased in recent days at a record premium to Brent futures, which are traditionally considered the main benchmark for market participants and the economy. At the same time, the futures contracts traded on the exchange reflect rather the expectations of financial players, as 1-2% of them usually end up being delivered.
"Paper markets," meaning exchanges where futures contracts are traded, are "completely disconnected from physical markets" where current supplies are being delivered, Jeff Curry, Carlyle Group's director of energy strategy, told Bloomberg today: "We're facing an incredible supply-side shock."
Brent futures are trading at $109 a barrel on Friday. A shortage of physical crude, primarily heavier, high-sulfur Middle Eastern grades, however, has led to even larger price increases for them and similar grades with immediate shipment.