The Iran war has lasted three weeks, the U.S.'s "stable oil price" card is "almost played out," and the gap between crude oil futures and spot prices is widening.

The Iran war has lasted three weeks, the U.S.'s "stable oil price" card is "almost played out," and the gap between crude oil futures and spot prices is widening.

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The Iran war has entered its third week, and a rare "disconnection between futures and spot prices" has emerged in the global crude oil market: Brent crude oil benchmark futures have surged more than 50% to about $112 per barrel, but the real cost in the spot market is far higher—the prices of refined oil products such as jet fuel have already exceeded $200 per barrel.

Jeff Currie, Chief Strategist of Energy Path at Carlyle Group, bluntly commented:

"The futures market has completely decoupled from the physical market. We are facing a massive supply shock."

The reason futures have failed to reflect the full extent of the rise in spot prices is largely due to a series of policy tools the US government has intensively employed to suppress oil prices.

But these tools are being rapidly exhausted.

Spot Market: The impact on consumers far exceeds what futures suggest

The Strait of Hormuz is almost completely closed, coupled with attacks on Middle Eastern energy facilities, leading to a severe contraction in the supply of physical crude oil. Asian refineries are forced to purchase cargoes from thousands of miles away at a hefty premium.

The transmission chain has appeared at every level: jet fuel has broken through $200 per barrel, with major European airlines saying the extra costs will be passed on to passengers; trucking companies are coming under pressure; some regions have already reduced purchases of marine fuel.

The IEA has characterized this event as the largest oil supply disruption in history.

Goldman Sachs estimates that around 17 million barrels per day of Persian Gulf crude oil flows are being affected by the conflict. The actual inflationary impact far exceeds that reflected in futures prices, putting pressure on central banks and the Trump administration facing the November midterm elections.

US "Oil Price Stabilization" Toolbox: Nearly Exhausted

Over the past two weeks, Brent crude has twice approached $120—a level unseen since 2022—forcing Washington to make intensive moves:

Release of Strategic Petroleum Reserves (SPR)—A large release has already been announced. US Treasury Secretary Bessent said on Fox Business Thursday that another release is under consideration, although the logistical feasibility is being questioned.

Lifting sanctions on Russian seaborne oil—Seeking to increase alternative supply sources.

Considering easing sanctions on Iranian oil—Bessent’s subsequent remarks on this matter shocked already weary traders: considering lifting oil sanctions on Tehran while at war with Iran left global traders, who have long been cautious with Iranian dealings, stunned.

Suspected intervention in the futures market—There is widespread speculation in the market that the US is directly intervening in futures trading, which Bessent denied. At the same time, sharp volatility has increased the cost of maintaining positions, objectively limiting the scale of traders’ positions and exerting some restraining effect on the futures market—but compared to the impact of the Strait of Hormuz’s closure, the effect is limited.

Price Shock May Intensify Further

Goldman Sachs and Citi warned this week that if the conflict continues, futures prices may break the all-time high of $147.50 per barrel set in 2008 in the coming weeks.

It’s worth noting that long-term significant deviations between futures and spot prices are historically rare, which means the spread between the two is bound to eventually converge—and it may not necessarily be spot prices falling back.

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