Asia and Europe are both competing! U.S. crude oil has been bought out...

Cailian Press, April 7 (Editor: Xiao Xiang) — According to industry insiders, the spot premium of U.S. WTI crude oil has soared to a record high, driven by fierce competition among Asian and European refiners to secure alternative Middle Eastern oil supplies disrupted by the Iran conflict.

Europe is usually the largest buyer of U.S. crude oil, but as Asian refiners begin sourcing from the Americas, Africa, and Europe under Middle Eastern conflict, the competition for supplies has intensified further.

Industry insiders and analysts say that the surge in crude oil prices is increasing costs and widening losses for refineries in Europe and Asia, putting enormous pressure on these companies—including state-owned enterprises—who are required by government mandates to continue producing fuel to ensure national security.

Paola Rodriguez-Masiu, Chief Oil Analyst at Rystad Energy, stated in a report on April 3, “Asian refiners shut out of Middle Eastern supply markets are fiercely bidding for every barrel of available crude in the Atlantic basin.”

A new price emerges every day

Traders say that the premium for WTI Midland crude shipped via Very Large Crude Carriers (VLCCs) to North Asia has reached $30-40 per barrel, depending on the benchmark used.

Dealers note that these premiums have further increased from the levels seen in late March and early April, when Japanese refiners including Taiyo Oil purchased 2 million barrels of U.S. WTI crude for July delivery at premiums close to $20 per barrel.

“Every day there’s a new price,” said one trader, adding that Asian refiners are facing serious losses due to spot premiums.

Another trader suggested that refiners should cut crude processing and buy refined products—if anyone is willing to sell.

In Europe, last Thursday, the price of WTI Midland crude shipped to the continent also traded at a premium of nearly $15 per barrel over Brent crude, reaching a historic high.

Rodriguez-Masiu explained, “Based on current physical price spreads and freight costs, it’s simply not profitable for European refiners to buy spot crude and process it through their systems.”

The “inversion” of WTI and Brent prices

Increasing signs indicate that, with Middle Eastern oil trade disrupted, U.S. crude has become an extremely valuable supply—many investors may have already noticed that last week, WTI futures prices surged past Brent futures.

Historically, WTI rarely traded at a premium over Brent.

As market analyst Julianne Geiger pointed out, part of this shift is technical: WTI near-month contracts still reflect oil delivery in May, while Brent has rolled over to June, distorting the relative strength of their benchmarks.

But a deeper driver may be the extreme spot pressure—WTI’s spot premium structure (backwardation) has soared to record levels—indicating immediate demand for safe, deliverable crude.

As global shipping routes become more uncertain, WTI crude has effectively gained a “safety premium,” narrowing or even reversing its usual discount to Brent.

This current price inversion suggests that the normal price signals tied to physical flow in the oil market may have already broken down.