Dated Brent, the price of deliveries bought and sold in the North Sea, has reached $141.37, surpassing levels recorded when Russia invaded Ukraine, according to data from S&P Global, which publishes this information. This surge indicates a growing gap between futures contracts and various segments of the physical market, where prices reflect increasingly scarce supply.
Dated Brent serves as the basis for a large number of transactions where actual oil cargoes are bought and sold, and a significant portion of supply has been lost due to the war with Iran. On the other hand, the futures market is largely oriented toward financial trading of so-called "paper barrels."
The Strait of Hormuz has been closed for over a month, causing, as reported by the International Energy Agency, the largest supply disruption in the history of the oil market. About one-fifth of the world's crude oil flows pass through this shipping route, forcing refineries to desperately seek any available quantities.
The last time Dated Brent reached such high levels was 18 years ago, when the global financial crisis, which had been developing for months, was on the verge of halting the historic rise in oil prices.
The current price increase reflects heightened demand in the North Sea, where traders have been offering record premiums for cargoes in recent days.
Unlike Dated Brent, the benchmark Brent futures traded on the Intercontinental Exchange remain lower than in 2022 and were trading around $107 on Thursday. This is because the value of Dated Brent represents the price of crude oil for a different, more immediate delivery timeframe, writes Bloomberg.