The spot price of dated Brent, considered the real-world price tag of crude oil, rebounded on Thursday as oil traders closely monitored a fragile ceasefire between the U.S. and Iran [1]. Dated Brent refers to physical cargoes assigned delivery dates from 10 days forward to one month ahead and is assessed based on bids, offers, and trades in the open physical spot market [1]. On Thursday afternoon, dated Brent was priced at $131.97 per barrel, up over 7% from the previous session but down from a record high of $144.42 on Tuesday, just before the U.S. and Iran announced a two-week truce [1]. Brent crude futures for June delivery were last seen trading 0.6% higher at $96.51 per barrel on Friday morning [1].
Energy analysts warn that the temporary truce is unlikely to alleviate acute signs of stress in the physical oil market, as an unprecedented gap has emerged between dated Brent and front-month Brent futures, suggesting supplies will remain tight for some time [1]. Andrejka Bernatova, founder and CEO of Dynamix Corporation III, stated, "Dated Brent at $144 is not just a price record. It's the physical market telling you that real barrels are becoming scarce. The market is pricing in scarcity, not just risk" [1]. Bernatova further commented, "Even with the ceasefire bringing the number down, the underlying stress hasn't gone away, and frankly, I think the market is getting ahead of itself. The Strait of Hormuz remains almost entirely blocked, and this ceasefire is fragile at best. Until those flows are actually moving again, the $144 print is less of a historical anomaly and more of a preview" [1].
Roughly 20% of global oil and gas typically passes through the Strait of Hormuz, a narrow maritime corridor connecting the Persian Gulf and the Gulf of Oman [1]. Shipping and maritime experts have indicated that traffic through this critical energy artery will not normalize anytime soon, further exacerbating supply concerns [1].
The acute stress in the physical oil market, reflected in the surge of dated Brent prices and the persistent gap with futures, signals ongoing scarcity and risk, despite the temporary ceasefire. Market participants are closely watching developments in the Strait of Hormuz, as any resolution to shipping disruptions could significantly impact oil prices [1].
CONCLUSION
The surge in dated Brent prices and the persistent supply tightness underscore the ongoing stress in the physical oil market, despite a fragile ceasefire between the U.S. and Iran. With the Strait of Hormuz remaining largely blocked and traffic unlikely to normalize soon, market participants should expect continued volatility and elevated prices until flows resume.