The North American Western Texas Immediate (WTI) crude jumped to $112 per barrel on Thursday, overtaking Brent at $107.57 for the first time in more than 15 years.
Normally, Brent trades at a premium, reflecting seaborne crude, while WTI sits at a discount. The current flip shows the US market desperate for a rescue due to disruptions on the Strait of Hormuz.
The last time when WTI was pricier than Brent was before 2011.
The spike is partly technical: WTI’s front-month contract covers May delivery, while Brent has rolled to June. But the bigger story is soaring demand. WTI backwardation has hit record levels, showing buyers are paying extra for crude they can access and deliver now.
In effect, US oil has gained a “security premium”.
Prices have so far surged over 10 percent today after US President Donald Trump threatened to “hit” Iran extremely hard”. Tanker traffic through Hormuz has remained nearly blocked, while European officials consider forming a coalition to restore it.
Regardless, WTI now leads the market in pricing physically available oil that can move freely.
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