When the market focuses on the US-Iran negotiations, a competition for oil is taking place, "the oil shortage in the coming weeks will be very huge."

When investors focus on the fragile Iran ceasefire negotiations, the global spot oil market is experiencing a completely different storm, a panic-driven barrel-racing battle caused by the blockage of the Strait of Hormuz, spreading from Asia to Europe and the Atlantic China Welding Consumables, Inc. Basin. According to Bloomberg on Saturday, this week the North Sea spot crude oil market saw 40 bids to buy, but only 4 bids to sell, with the price of near-month oil exceeding a historic high of $140 per barrel. Meanwhile, the futures market tells a different story - Brent crude for delivery in June fell 13% this week, closing at about $95 per barrel, reflecting a price difference of over $30 between the two markets, highlighting the deep divide between spot supply and paper expectations. Sultan al Jaber, CEO of Abu Dhabi National Oil Company, wrote on LinkedIn, "The last batch of transit goods before the conflict in the Strait of Hormuz has begun to arrive at their destinations, exposing a 40-day global energy flow disruption." Traders warn that even if negotiations make progress this weekend and the Strait is reopened for navigation, it will still take weeks for the crude oil from the Gulf to reach refineries in Asia and Europe, making it difficult to bridge the supply gap in the short term. Macquarie warns that if the conflict continues until June, oil prices may surpass $200 per barrel. Spot market vs. futures market: two completely different worlds The global benchmark for spot crude oil, Dated Brent, hit a historic peak of $144 per barrel this week, surpassing the high point of 2008, despite futures prices still being far below historical records. By Friday, Dated Brent had fallen to $126 per barrel, but still had a premium of over $30 over June futures. The huge price gap has been particularly extreme in the North Sea spot market. According to media reports, trading companies such as Trafigura Group and Gunvor Group are bidding over $22 above Dated Brent for North Sea crude to be delivered from late April to early May. The premium for Nigerian cargoes to be shipped next month has reached $25 per barrel, compared to less than $3 before the Iran conflict erupted. Neil Crosby, research director at Sparta Commodities AS, said, "Crude oil supply is scarce. The spot Brent market is chaotic, prices have risen too high. At this rate, European refineries may have to reduce their operating rates as early as next month." Asian refineries race to secure barrels at any cost, U.S. exports hit record highs Asian countries heavily reliant on the Strait of Hormuz have extended their procurement reach to all corners of the globe. Japanese refineries have sparked a rush to purchase oil from the U.S., even renting small vessels to cross the Panama Canal and shorten transportation times; Indian refineries have significantly increased purchases of Venezuelan crude oil, with shipments in the first week of April nearing 6 million barrels, about twice that of the same period in March. Some Asian refinery traders have stated that they are no longer concerned about prices, only focusing on locking in as many barrels of crude oil as possible from anywhere to ensure energy security. On the U.S. side, President Trump tweeted over the weekend, stating that "a large number" of oil tankers are heading to the U.S. to load crude oil. The premium of Houston Midland WTI crude (MEH) over the U.S. benchmark crude has risen to nearly $4 per barrel, about four times the pre-war level. Refineries under pressure, finished products market facing further challenges The extreme price difference between spot crude oil and futures is putting immense financial and operational pressure on refineries. With spot procurement costs far exceeding futures prices available for hedging, refineries may appear profitable on paper, but face serious cash flow management challenges in reality. Roberto Ulivieri, a consultant at Midhurst Downstream and former Saudi Aramco refining economist, said, "This is a huge price risk management challenge - on paper profits look good, but the cash flow from buying a cargo and deciding to refine it could be very different." Some refineries have begun to exit the market, leading to a decrease in production and further tightening of finished product supplies. Currently, jet fuel and diesel prices have surged to historical or near-historical highs above $200 per barrel. Data from the U.S. Energy Information Administration shows that U.S. gasoline inventories have dropped to the lowest levels in nearly 16 years. The ripple effect spreading "from east to west," the U.S. may become the next pressure point According to a report by J.P. Morgan analysts on March 26, the past four weeks of disrupted oil flow through the Strait of Hormuz will cause a "sequential" shock to global supply - starting from Asia, through Africa, to Europe, and ultimately impacting the U.S., with most regions facing pressure in April. The Philippines has declared an energy emergency, with supply pressures expected in early April in Africa and mid-April in Europe. The global oil system is transitioning from a "flow shock" to a "inventory consumption problem," with the timing of events rather than simply supply volume becoming the core variable driving market effects. Macquarie commodity strategist stated in a client report that the market currently expects Trump to announce a negotiation victory soon, but also gives about a 40% probability scenario: if the conflict continues until June, oil prices could reach $200 per barrel, and U.S. gasoline retail prices could jump to around $7 per gallon. Amrita Sen, co-founder of Energy Aspects, warned, "The spot market does not follow social media, but continues to strengthen as supply disruptions spread from Asia to the Atlantic China Welding Consumables, Inc. Basin. If futures prices cannot keep up with the reality of the spot market, U.S. exports may continue to be high until domestic refineries face a shortage of crude oil." This article is based on a reprint from Wall Street Seen, edited by GMTEight: Chen Wenfang.