Spot shortage! The spot Brent crude oil price soars past $140, the US oil spot premium hits a record high, and the futures settlement price breaks above $110 for the first time in four years.

Global physical crude oil price benchmarks surge to their highest level in more than 16 years, with signals of supply tightness also flashing in the U.S. crude oil market.

On Thursday, April 2, the spot Brent crude oil price (Dated Brent) touched $141.37 per barrel, the highest level since 2008, surging sharply from more than $128 the previous day.

Spot Brent crude oil is one of the most important crude oil pricing benchmarks globally, and is widely used to guide pricing for about two-thirds of the world’s crude oil trades.

Meanwhile, the WTI crude May contract’s intraday high jumped by 13.8%, and the U.S. crude settlement price rose above $110 per barrel for the first time since 2022.

Wall Street Insights said that during a nationwide TV address, Trump released tough signals, causing market bets on a quick end to the war to reverse rapidly. Oil prices then surged, triggering strong concerns that crude oil supply will remain tight in the near term.

Physical oil prices break above $140, and the WTI near-month spread hits a record high

Spot Brent crude oil rose to $141.37 per barrel on Thursday, surpassing the peak level of the Russia-Ukraine conflict in 2022, and setting the highest record since 2008.

Spot Brent crude oil refers to Brent crude with confirmed loading dates, reflecting the actual transaction prices of spot loaded crude oil in the North Sea.

The Strait of Hormuz handles nearly a quarter of global oil and natural gas transportation volume, and passage is still severely restricted. Supply-tightness signals in the U.S. crude oil market are also heating up rapidly.

The WTI near-month spread—i.e., the price difference between the two most recently expiring contracts—widened at one point on Thursday to more than $16 per barrel, the largest premium on record.

When near-month contract prices are far higher than those of deferred contracts, it usually means the market expects that near-term supply will be extremely tight. Frank Monkam, macro trading director at Buffalo Bayou Commodities, said:

The war premium after Trump’s remarks is concentrating in the near-month contracts, causing the near-month spread to widen sharply.

Traders said this rally was driven by two forces: first, bets that the market’s war will end quickly were quickly closed out and reversed; and second, buyers in Asia and other regions snapped up U.S. crude oil in large quantities, with the market expecting the U.S. crude oil market to tighten significantly over the coming weeks.

Oil prices nearly double this year, and concerns about inflation and growth intensify

The Middle East war continues to disrupt global energy markets, and U.S. oil prices have already nearly doubled since the start of the year.

U.S. domestic gasoline retail prices have broken above $4 per gallon, reaching the highest level since 2022, and upward pressure on inflation has risen accordingly.

The sustained surge in oil prices is raising market worries about inflation rebound and slower economic growth happening at the same time, putting investors into a more complex macro environment.

Trump’s tough tone in his remarks shattered the market’s expectations that the fighting would soon end, forcing investors to reassess the possibility that supply disruptions could become prolonged.

The International Energy Agency has categorized this crisis as the most severe supply shock in the history of the oil market, and its duration is still difficult to predict.

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