North American WTI crude rocketed to $112 per barrel on Thursday, surpassing Brent at $107.57—a rare event not seen in over 15 years. Normally, Brent trades at a premium due to its seaborne nature, while WTI sits at a discount. This unusual inversion highlights soaring demand for U.S. oil as disruptions at the Strait of Hormuz tighten global supply.
The last time WTI traded above Brent was prior to 2011, making today’s shift a striking signal of market stress. Part of the surge is technical: WTI’s front-month contract covers May delivery, while Brent has rolled to June. The bigger driver, however, is extreme immediate demand. WTI backwardation has reached record levels, showing buyers are willing to pay more for barrels they can access and deliver immediately. In effect, U.S. crude has gained a “security premium.”
Prices jumped more than 10% after U.S. President Donald Trump warned of a severe response against Iran, while tanker traffic through the Strait remains largely stalled. European officials are reportedly exploring a coalition to restore oil flows.
In today’s volatile market, WTI now sets the pace, reflecting the premium on physically available oil that can move freely, bypassing the bottlenecks affecting global seaborne supplies.
