Hormuz unblocking triggers a “supply surge”: massive Middle Eastern crude shipments resume, North Sea Brent spot benchmark drops to two-year low

```

After the reopening of the Strait of Hormuz, Middle Eastern crude oil accelerated its flow into the European market. Multiple key indicators in the North Sea crude oil market simultaneously weakened, and concerns about oversupply continue to rise.

Forties crude, an important component of the Brent crude benchmark, fell to a two-year low in the Platts pricing window under S&P Global Commodity Insights. WTI Midland crude, also part of the benchmark, dropped to a three-month low. Brent spread contracts and related derivatives markets showed clear signs of pressure as well.

Supply pressure is not from a single source. In addition to the return of Middle Eastern crude, supplies from the Atlantic Basin remain at high levels. Multiple sources combine to strengthen the effect, further exacerbating the already ample inventory situation faced by European refiners and putting downward pressure on global oil prices.

Benchmark Pricing Weakens Across the Board

Weakness in the North Sea market is evident across multiple dimensions. Forties crude hit a two-year low in the Platts window, while WTI Midland dropped to a three-month minimum.

In the derivatives market, the six-cycle Brent spread contract (CFD) entered a contango structure for the first time since the outbreak of the US-Iran conflict, meaning near-month contract prices are lower than forward contract prices. This price structure is typically seen as a signal of ample supply.

Another key indicator, Brent Deferred Front Line (DFL) also turned negative, meaning spot prices are lower than near-month futures prices, further confirming the weakness of the spot market.

The Dubai benchmark crude previously signaled something similar—a continuously deepening contango structure. Traders have said that, despite shipping flows through the Strait of Hormuz not fully returning to normal, concerns over oversupply are spreading in the market.

Middle Eastern Tankers Line Up for Europe

According to media reports, at least six supertankers carrying crude from the UAE and Oman are expected to head to Europe next month.

More cargoes may follow—UAE is increasing exports, and around 31 ships previously delayed due to regional turmoil will gradually be released.

Although most of this cargo is destined for Asia, analysts note that, given European refiners already have ample supply, some cargoes may be diverted to Europe, further increasing local market absorption pressure.

Atlantic Basin Supply Also High

The timing of the return of Middle Eastern crude coincides with a supply peak in the Atlantic Basin, multiplying pressure on the market.

Crude from the US Gulf Coast flowing to Europe this month is holding at nearly 2 million barrels per day; meanwhile, shipments of CPC blend crude from Kazakhstan’s Caspian Pipeline Consortium in July are expected to reach close to the historic record high of 1.8 million barrels per day.

Multiple sources of supply are pouring in simultaneously, putting the European crude market under supply pressure rarely seen in recent years. With no noticeable improvement signals on the demand side, the market is struggling to find effective price support in the short term.

Risk Warning and DisclaimerThe market has risks, and investment should be cautious. This article does not constitute personal investment advice, nor does it consider any individual user's specific investment goals, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular circumstances. Invest accordingly, at your own risk. ```