North American crude benchmark West Texas Intermediate (WTI) has surged to $112 per barrel, overtaking Brent Crude at $107.57 for the first time in over 15 years.
Under normal conditions, Brent crude trades at a premium because it reflects seaborne oil, while WTI typically remains cheaper due to its inland US supply dynamics. This rare reversal signals significant disruption in global oil flows and a shift in market demand.
The spike is partly driven by contract timing differences, as WTI’s front-month contract reflects May delivery, while Brent has rolled over to June. However, analysts say the bigger factor is a sharp increase in demand for immediately available oil supplies.
WTI has entered strong backwardation, meaning buyers are willing to pay higher prices for oil that can be delivered right away. This has effectively created a “security premium” for US crude, as it is seen as more accessible amid global supply uncertainties.
The surge comes amid rising geopolitical tensions involving Iran, with threats from Donald Trump and disruptions in tanker traffic through the Strait of Hormuz further tightening supply routes.
As a result, WTI is now leading global pricing, reflecting the premium placed on physically available oil that can move without disruption, while traditional pricing dynamics between Brent and WTI have temporarily reversed.
