Dated Brent Spot Price Tops $144 a Barrel, Setting Record as Iran War Hits Supply

Global oil supply has tightened sharply in the fallout from the Iran war, sending Brent spot prices to a record high.

Bloomberg reported on June 7 that Dated Brent, the benchmark for physical North Sea crude, climbed as high as $144.42 a barrel, the highest level since the series began in 1987.

The rally was also evident in the gap with futures prices. Brent futures were trading near $109 a barrel the same day, but surging demand for crude available for immediate delivery drove the spread sharply wider.

Morgan Stanley said unusually high premiums were forming as buyers rushed to secure refinery-ready Atlantic Basin crude for prompt delivery. It added that supply pressure spread across the broader Brent market as Asian buyers began drawing in Atlantic cargoes.

The Iran war is at the center of the spike. The conflict has sharply curtailed energy flows through the Strait of Hormuz, a chokepoint for about 20% of global oil shipments, disrupting supply.

Global refiners are competing to lock in immediately available crude. At the same time, disruptions to supplies of refined products such as diesel and jet fuel are sending refining margins sharply higher.

The shortage is even more pronounced in the physical market. In the price-assessment process, some cargoes attracted 12 bids without matching sell offers, the report said.

Platts said the latest price jump reflected historic market volatility and supply disruptions.