When the first US and Israeli missiles hit Iran more than a month ago, oil prices at $150 a barrel seemed a doomsday forecast. But the price of Brent crude is already a hair’s breadth away from $150, while the futures price has not yet risen.
The Brent front month price – which is used as a benchmark for 80% of the world’s crude oil – has stayed above $100 a barrel for several weeks. Up and down as US President Donald Trump changed war goals and deadlines, it closed above $109 on Thursday, already higher than at any time since the Ukraine conflict escalated in early 2022.
But to understand how the current crisis is getting worse, it is important to look at the price of Dated Brent. Monitored only during market disruptions, this represents the actual spot price that buyers are paying for Brent cargoes in the North Sea. On Thursday, it hit $141.37, a level not seen since the start of the 2008 financial crisis.
This speaks to a severe shortage of supply on the ground as buyers are willing to pay huge premiums to get their hands on the barrels, not in the near future, but right now.
What is the significance of the large spread?
What newspapers and advertisers usually show is the forward month’s Brent price: bought by traders for delivery on a specific date the following month. This is the most liquid and widely quoted measure. Most importantly, prices reflect future expectations, so in this case investors are betting on at least some kind of ups and downs in the Persian Gulf.
The forward month is also a field for speculators who are not interested in receiving any oil: instead they seek to take advantage of price changes and exit their positions before delivery. The forward month price of course reflects reality – but it is also partially funded.
The fact that Brent crude oil is going for a price of $32 more than the month ahead shows that the actual supply of oil is very limited. Typically, the spread between the forward month contract and Dated Brent is less than $2, although in the submarket it can fluctuate more. What we are seeing now is unusual. This high price of Dated Brent is not the result of hedge funds or fast traders bidding up prices. This is what changes hands down for real barrels.
The center of the conflict is the Strait of Hormuz. Much depends on what happens in this choke. Less than 40km wide at its narrowest point, just under a third of the world’s marine oil makes its way from Middle Eastern producers to global markets.
Once a free international waterway, the channel has been turned into a de-facto toll road controlled by the Iranian military. Iran’s Islamic Revolutionary Guard Corps (IRGC) decides which ships are allowed to pass, with a small number of ships from China, India, Pakistan and South Africa passing through in recent weeks. Daily trips are down from around 130 before the war, to last month’s low figures, and around a dozen this week.
Why is Brent’s one-month forward trading not close to the spot market?
Based on the price differential, the Brent futures market is still open about the prospect of a resolution. Some analysts, however, believe that the market is not fully aware of the supply shortage that is now driving prices through the roof. There is also common internet chatter about the futures market being manipulated to put some sort of cap on oil prices. In other words, a large spread gathers a lot of attention.
Meanwhile, there are no signs that normal traffic will resume in the Strait of Hormuz anytime soon. US President Donald Trump has alternated between declaring the route open, telling shipping companies “have courage” and went through it without a care, vowing that the United States would open it, and telling its allies to handle the closure themselves. The message, and Trump’s timetable for ending the crisis, changes by the day.
If you look at other variables, there are signs of an escalating conflict. Dubai and Omani crude are now trading above $150, reflecting the difficulty these Gulf states are in selling their products, while West Texas Intermediate (WTI) – the price in landlocked Oklahoma – surpassed Brent by $3 on Thursday. This suggests that traders are predicting more uncertainty with the supply of Brent crude, and are instead leaning towards US crude.
Additionally, WTI’s flash spread (the price difference between the two closest contracts) widened to more than $16 a barrel on Thursday, the largest premium on record. This type of spread often results from short sellers who had bet on a drop in prices (in this case due to the immediate end of the war) being forced to buy contracts to close their positions, thereby increasing prices for the next month.
How high will the oil go?
A wide spread between what hedge fund traders see on their Bloomberg channels and what buyers are paying right now is a bright red flag, signaling a significant supply shortfall. The price of crude oil is approaching the psychological barrier of $ 150, and analysts have revised their forecasts for the worst, and CNN announced Thursday that the crisis will continue until June, the monthly price of $ 200. “it’s not as crazy as it sounds.” What is not said is the fact that with a forward month price of $200, the spot price will undoubtedly be higher.
Beyond Brent and WTI, there are several different oil prices, representing more than 100 different blends of crude oil, their prices, and their different futures contracts. All are higher than they were in February, and for the average person around the world the result is the same: the war on Iran has made oil, food, and basic necessities more expensive, and life harder.
A global economic recession is already inevitable this year, with energy-importing countries being hit the hardest. This will be clear to many by June.
– Kirill Dmitriev (@kadmitriev) April 2, 2026
“A global economic recession is already inevitable this year, with energy-importing countries being hit the hardest,” Russian presidential envoy Kirill Dmitriev warned on Thursday. “This will be clear to many by June.”
