Physical oil hits fresh record high near US$150 a barrel as Hormuz crisis worsens

[LONDON] The price of physical crude oil cargoes for prompt delivery to Europe hit a record high near US$150 a barrel on Monday (Apr 13) and those for Africa hit new peaks, according to LSEG data and traders, as the US plan to blockade the Strait of Hormuz raised concern of a prolonged disruption to supplies.

The price of Brent crude futures – the benchmark price for oil in financial markets – rose 6 per cent for June delivery to more than US$100 a barrel as the US Navy prepared to block ships to and from Iran via the Strait of Hormuz after Washington and Teheran failed to reach a deal to end the war. That is still far short of Brent’s all-time high of US$147 a barrel set in 2008.

However, the price of physical crude cargoes for immediate delivery is significantly higher as the effective closure of Hormuz since the war started on February 28 has sent buyers in Europe and Asia scrambling to secure supplies. The outright price of North Sea Forties crude reached US$148.87 a barrel on Monday, LSEG data showed, exceeding its 2008 peak.

The divergence highlights how strong demand from Asian and European refiners for non-Middle East barrels is driving up prices for replacement crudes that can be delivered soon, such as those in Europe and Africa. It also shows that disruption is expected to persist.

“Physical transactions are under a lot of strain,” the CEO of Spanish oil company Repsol, Josu Jon Imaz, said of the premium at which physical cargoes are trading to prices in financial markets, at an event on Monday.

Fuel prices soar, jet fuel supply crunch feared

Refined product prices have also soared. Jet fuel prices were off their record highs from a month ago but remain elevated, hovering near US$200 a barrel and having almost doubled since the war started.

A similar picture has emerged for diesel. The price for diesel cargoes delivered to North West Europe reached around US$170 per barrel on Friday, according to LSEG data, up from around US$102 before the war started.

Prices for those two fuels have surged in particular because Europe is structurally short of them, meaning that its refineries produce less than the continent consumes and imports are needed to fill the gap.

In 2025, as much as 62 per cent of the EU-27 and the UK’s jet fuel imports came from the Middle East, and 42 per cent of their diesel, data from analytics firm Kpler showed, highlighting the scale of the challenge importers now face in trying to keep European airports, cars, and industries fed with fuel.

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Europe’s airport industry group (ACI) has already warned that the continent could face a systemic jet fuel shortage in just three weeks unless the Strait of Hormuz reopens.

Other crude oil grades hit records

Forties and other physical crude cargoes in Europe and Africa trade at a differential to dated Brent BFO-, a physical benchmark for prompt cargoes. Dated Brent is trading over US$20 above June Brent futures, according to LSEG data.

In the North Sea, other major grades Oseberg and Ekofisk were also bid to fresh record premiums on Friday. US WTI Midland crude delivered to Europe traded at a US$21.85 premium to dated Brent on Friday, also the highest ever.

In West Africa, Nigerian Bonny Light and Qua Iboe crudes are being offered in excess of a US$10 premium to dated Brent, a trader said, a record high for that grade. REUTERS