The spread between West Texas Intermediate (WTI) and Brent crude reached as much as $12.05 per barrel, the widest discount for U.S. crude since March 2015. The divergence reflects a sharp rise in global prices amid geopolitical tensions, while domestic supply conditions in the United States continue to weigh on WTI.
At the centre of the disruption is the escalating conflict involving Iran and Israel, which has triggered attacks on critical energy infrastructure in the Middle East and heightened fears over supply security. The situation has particularly impacted Brent, which is more sensitive to global supply shocks, pushing it sharply higher compared to its U.S. counterpart.
Analysts say the widening gap has opened a lucrative arbitrage window for traders, who can profit by purchasing cheaper U.S. crude and exporting it to higher-priced markets in Europe and elsewhere. Despite a surge in shipping costs—especially for Aframax tankers transporting crude from the U.S. Gulf Coast—the price differential remains large enough to sustain profitable trade flows.
Market participants report a noticeable uptick in cargo bookings from the U.S. Gulf Coast, with more vessels expected to head toward American ports in the coming days to capitalise on the opportunity.
Brent prices climbed by 3.8 per cent during the session following threats to Gulf energy infrastructure and an attack on Iran’s South Pars gas field, a key component of global energy supply. In contrast, WTI posted only marginal gains of 0.1 per cent, underscoring the growing divergence between the two benchmarks.
Further pressure on U.S. crude has come from rising domestic inventories and coordinated efforts by consuming nations to stabilise markets. The International Energy Agency (IEA) announced plans to release 400 million barrels from strategic reserves, including 172 million barrels from the United States’ Strategic Petroleum Reserve.
In addition, stockpiles at Cushing, Oklahoma—the delivery hub for WTI futures—have risen to their highest levels since August 2024, according to data from the Energy Information Administration. The build-up in inventories has further dampened WTI prices, widening the spread with Brent.
While the arbitrage opportunity is expected to drive a short-term surge in U.S. crude exports, analysts caution that rising freight costs could eventually narrow the window. Increased demand for shipping capacity is already pushing up tanker rates, which may limit how long the trade remains profitable.
Overall, the current market dynamics highlight the growing impact of geopolitical risk on global oil pricing, with regional disruptions continuing to reshape trade flows and benchmark relationships.