The world is in a panic over oil shortages: spot Brent prices hit a record high

As the fighting in the Middle East escalates, European and Asian refiners are buying certain crude oil grades at record prices approaching $150 per barrel, far above futures market prices, highlighting that energy supply is worsening.

According to data from S&P Global Energy’s Platts, shortly before the story was published, “Dated Brent,” the spot benchmark for most global crude oil pricing, rose to $144.42 per barrel, surpassing the $144.22 record high set in 2008.

At present, at least 12 million barrels per day of crude oil supply in the Middle East has been forced offline, accounting for about 12% of global supply, because Iran has effectively blocked the Strait of Hormuz.

Some crude grades have already moved ahead of prior record highs. LSEG data shows that on Tuesday, the North Sea Forties crude spot price rose to $146.09 per barrel, exceeding the 2008 level and also setting a record high.

Because refiners in Asia and Europe are scrambling to replace disrupted Middle East crude supplies, competition for alternative crude oil available for immediate delivery (such as European and African crude) has intensified, pushing up these spot oil prices.

The pricing of Forties and many other global spot crudes is tied to “Dated Brent.” According to LSEG data, the Dated Brent price is nearly $20 higher than the Brent crude futures contract for June delivery, because it reflects spot prices available for immediate delivery.

Last month, Brent crude futures at one point neared the $120 per barrel threshold, recording the highest level since 2022, but still below the $147.50 record high set in 2008.

Senior oil trader Adi Imsirovic said the main factor driving the surge in prices for Forties and other grades is panic over supply: “When a real physical shortage actually shows up, people don’t think about July delivery—they think about June loading, meaning you need the oil now.”

Morgan Stanley analysts also said in a report: “The market is currently frantically buying spot crude oil that can be put into refineries immediately, and the pressure first shows up in the benchmark segment that is closest to actual supply concerns.”

（Source: Caixin Global）