Global rush to buy crude oil; US crude oil premium hits record high.

```

Asian and European refiners are fiercely competing to replace Middle Eastern crude supplies, pushing the spot premium for US West Texas Intermediate (WTI) to historic highs.

According to media reports on Tuesday, the Strait of Hormuz is effectively closed, severely disrupting Middle Eastern crude flows. Against this backdrop, the spot premium for July delivery of WTI crude has jumped to the $30-$40 per barrel range, a substantial rise from the roughly $20 premium at the end of March.

Paola Rodriguez-Masiu, Chief Oil Analyst at Rystad Energy, pointed out in a report on April 3, "Asian refiners, shut out of Middle Eastern supply, are aggressively bidding for every available barrel from the Atlantic Basin."

The sharp rise in the premium is significantly increasing costs for refiners in Asia and Europe, expanding their losses, with US state-owned enterprises facing particularly severe pressure as they fulfill government fuel supply obligations. One trader said, "Every day brings a new price," while another said refiners might find it more cost-effective to reduce crude processing and instead buy refined products—assuming there are still sellers willing to supply the market.

Record premium: WTI rare reversal over Brent

According to multiple traders cited by media, the quoted price for July delivery of WTI crude to North Asia is about $34 per barrel above the Dubai benchmark, about $30 per barrel above spot Brent, and nearly $40 per barrel compared to August ICE Brent benchmark.

This premium level pushed WTI crude futures to rare highs, surpassing Brent crude futures last weekend. Usually, Brent crude, as the benchmark for seaborne oil pricing, leads in global supply shocks, while WTI has traditionally traded at a discount.

It’s worth noting that this price inversion is partly caused by technical factors—WTI’s nearby contract corresponds to May delivery, while Brent has rolled into the June contract, resulting in distorted apparent price differences. But the deeper driver is the extreme tightness in the spot market: the spread between WTI’s near and distant-month contracts has reached record highs, reflecting urgent demand for safe barrels deliverable immediately.

Middle East supply disruption: Atlantic Basin oil becomes the focus

The effective closure of the Strait of Hormuz has prevented a large volume of Middle Eastern crude from being exported, with Gulf oil producers also cutting upstream output, further tightening global supply. Europe is usually the largest importer of US crude, but the entry of Asian buyers has disrupted original supply-demand patterns.

Asian refiners are currently expanding their purchase sources to the Americas, Africa, and even Europe to seek alternative supply. Companies like Japan’s Taiyo Oil have completed WTI procurement at about a $20-per-barrel premium from late March to early April, but the further surge in premiums means subsequent procurement costs will be significantly higher.

As global shipping route uncertainty continues to increase, WTI crude has effectively gained a “safety premium,” not only narrowing its traditional discount to Brent, but even reversing it. Analysts note that the current price inversion indicates a structural failure in normal pricing signals associated with physical flows.

Refiners under pressure: State-owned enterprises hit hardest

Record crude premiums are eroding refinery margins across the board. According to media reports, losses for refiners in Asia and Europe continue to expand, with some enterprises facing severe operating pressure.

State-owned refiners are especially caught in a dilemma—on one hand needing to fulfill government fuel supply obligations, on the other hand facing high crude procurement costs. Traders suggest that at current premium levels, it is economically more reasonable to reduce crude processing and switch to purchasing refined products, but refined product supply is also tightening.

The backwardation of near-month WTI futures contracts has reached historical extremes, further confirming the market’s desperate demand for immediately deliverable crude. This signals to investors that tight crude spot supply is unlikely to ease quickly in the short term, and price volatility risks will remain elevated.

Risk Warning and DisclaimerThe market carries risks; investment requires caution. This article does not constitute personal investment advice and does not consider the individual investment goals, financial situation, or needs of any particular user. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their specific circumstances. Investing based on this, responsibility is your own. ```