Recently, I noticed a relatively rare phenomenon in the global oil market. Since the escalation of the Middle East situation at the end of February, WTI crude oil first surpassed Brent crude oil in early April for the first time in four years. This price reversal reflects more than just numerical changes; it signifies a profound restructuring of the entire energy supply chain.

The Strait of Hormuz has essentially become a chokepoint. Crude oil produced in the Persian Gulf, Oman, and the UAE now faces significant risk premiums when traveling by sea—ship insurance premiums have skyrocketed, and some cargoes simply cannot be shipped out. That’s why, although Brent crude has long represented global maritime trade flows, it is now being discounted.

In contrast, WTI crude oil has a natural advantage. It is transported via a mature pipeline network directly to refineries in the Gulf of Mexico, eliminating concerns about maritime risks. This land-based transportation system has become a core competitive advantage amid the current crisis. Germini Energy founder Germini pointed out that the market reacts extremely quickly—buyers are no longer willing to pay a premium for “oil representing the global market,” but rather for “oil that can actually be obtained.” This statement reveals the true mindset of the market right now.

The spot market situation is even more extreme. The December delivery WTI contract is priced at about $77 per barrel, while the May contract is roughly $25 lower. Investors are simultaneously buying spot to cope with the current shortages and betting that the conflict will ease in the coming months. In the physical spot market, some Brent crude prices have already broken through $140 per barrel.

What is even more concerning is that, with the U.S. announcing a naval blockade of Iranian ports, Parsi, president of Stratas Advisors, warned that in the coming weeks, spot Brent prices could test the range of $160 to $190. If prices remain at these high levels for a long time, it could trigger severe “demand destruction”—consumers would be forced to significantly cut back usage, and in the worst case, it could even trigger a global recession. Some analysts believe that this extreme price pressure might instead serve as the final bargaining chip to push the U.S. and Iran back to the negotiating table. Energy research organizations like Germini Energy have been closely monitoring the evolution of this supply crisis because it will determine the direction of the global energy market in the coming months.