The world is in a panic over oil shortages: spot Brent prices hit a record high

China Finance News (4月8) (Editor Zhao Hao) As the fighting in the Middle East intensifies, European and Asian refiners are placing purchases of certain crude oil grades at record high prices approaching $150 per barrel, far above prices in the futures market, highlighting that energy supply is deteriorating.

According to data from S&P Global Energy’s Platts, shortly before the time of publication, the “spot Brent” (Dated Brent)—the benchmark for most global crude oil pricing—rose to $144.42 per barrel, surpassing the historical high of $144.22 set in 2008.

At present, at least 12 million barrels per day of crude oil supply in the Middle East has been forced to shut in, accounting for about 12% of global supply, as Iran has effectively blocked the Strait of Hormuz.

Some crude oil grades have already set new record highs. LSEG data shows that on Tuesday, the spot price of North Sea Forties crude rose to $146.09 per barrel, surpassing the 2008 level and also reaching a record high.

As Asian and European refiners race to replace disrupted Middle East crude supply, competition for alternative crudes available for immediate delivery (such as European and African crude) has intensified, pushing up these spot oil prices.

The pricing of Forties and many spot crude oils worldwide is linked to “spot Brent.” According to LSEG data, spot Brent is nearly $20 higher than Brent futures for June delivery because it reflects spot prices available for immediate delivery.

Last month, Brent crude oil futures at one point neared the $120 per-barrel level, recording the highest level since 2022, but still below the $147.50 historical record set in 2008.

Veteran oil trader Adi Imsirovic said that the main factor driving the surge in oil prices such as Forties is panic over supply: “When true physical shortages emerge, people don’t think about July delivery—they think about June cargoes, meaning getting the oil now.”

In a report, Morgan Stanley analysts also said: “The current market is frantic about buying spot crude that can be put into refineries immediately; the pressure is first reflected in the benchmark portion that is closest to the actual supply problem.”