Physical Crude Prices Hit Record Highs Despite Ceasefire
Physical oil prices reached record highs this week despite a ceasefire between the U.S. and Iran. Supply disruptions keep markets tight as futures tumble.
European and African physical crude oil prices have surged to record highs, diverging sharply from the futures market following a ceasefire agreement between the United States and Iran. While benchmark futures for Brent Crude Oil and WTI fell by 13% and 16% respectively on Wednesday as investors anticipated the reopening of the Strait of Hormuz, the physical market continues to price in significant and prolonged supply disruptions. The outright price of North Sea Forties crude reached an all-time peak of $146.43 per barrel on Thursday, reflecting intense competition among Asian and European refiners for prompt replacement barrels outside of the Middle East.
Sparta Commodities analyst Neil Crosby highlighted that the recovery of the global supply chain will not be immediate, which sustains the gap between physical prices and financial instruments like BRENT OIL ETC:
