LONDON, April 3, 2026, 12:10 (UTC+01:00).
Oil’s sharpest alarm is now coming from the physical market. Dated Brent, the benchmark for North Sea cargoes in the physical market, rose to $141.37 a barrel on Thursday, the highest since 2008, with oil markets shut on Friday for Good Friday. Bloomberg
That matters because the world still has no quick fix for the Strait of Hormuz, the Gulf shipping lane that normally carries about one-fifth of global oil trade. A British-led call with about 40 countries on Thursday ended without a specific agreement on how to restore free navigation. Reuters
Futures were bad enough. Brent settled up 7.78% at $109.03 and U.S. West Texas Intermediate climbed 11.41% to $111.54 after President Donald Trump said Washington would intensify attacks on Iran, leaving traders with no fresh timeline for ending the war or reopening the route. Reuters
The shape of the U.S. market looked even worse. May WTI traded as much as $16.70 above June in a record premium, a form of backwardation — when near-term barrels cost more than later ones — that points to tighter supply now than further out. Andy Hendricks, chief executive of Patterson-UTI, said some U.S. operators may drill more later this year if higher longer-dated prices hold. Reuters
Markets had leaned the other way before Trump’s Wednesday night speech. Joe Brusuelas, chief economist at RSM, said investors were looking for a “near-term end to hostilities.” They got the opposite. The Washington Post
The next shock is likely to land at the pump. Patrick De Haan said the U.S. average gasoline price, already above $4 a gallon, is headed to $4.25-$4.45 next week and could top $5 within a month if no workable plan emerges to reopen Hormuz; diesel, which drives freight costs, could break its 2022 record within two weeks. Reuters
Europe is bracing for a longer squeeze. EU Energy Commissioner Dan Jorgensen said the bloc is weighing options including fuel rationing and more releases from emergency reserves, warning energy prices would be higher “for a very long time.” Reuters
Import-dependent economies are already passing the pain on. Pakistan raised diesel prices 54.9% and petrol 42.7% on Thursday, its second increase in less than a month, after ministers said broad fuel subsidies had become unaffordable. Reuters
But oil spikes do not move in a straight line. J.P. Morgan said its base case still assumes negotiations eventually reopen the strait after a period of supply strain and inventory drawdowns, though it warned prices could climb to $120-$130 in the near term and above $150 if disruption lasts into mid-May. Reuters
For now, even the usual pecking order between benchmarks has flipped. WTI closed above Brent for the first time since May 2022, a rare reversal that analysts linked to the relative availability of U.S. barrels outside the conflict zone. marketwatch.com
