Oil Prices Surge Past $140, Reaching Highest Levels Since 2008

The price of Brent crude oil, which is supplied to the North Sea for trading, has reached $141.37 per barrel, exceeding the levels observed during Russia's invasion of Ukraine. This surge in prices indicates a growing gap between futures contracts and various segments of physical markets, which are increasingly assessing tighter supply conditions.

The Brent futures market, which is based on fixed delivery dates, underpins a significant number of transactions where actual oil batches are bought and sold. However, a considerable portion of supply has been lost due to the ongoing conflict with Iran. In contrast, the futures market is largely oriented towards financial trading of so-called 'paper barrels,' which may not accurately reflect the real situation in the physical market.

The Strait of Hormuz, a crucial waterway for oil transportation, has been closed for over a month. According to the International Energy Agency, this has resulted in the largest supply disruption in the history of the oil market. This waterway accounts for approximately one-fifth of the world's crude oil volume, and refineries are desperately trying to secure any available stocks to avoid shortages.

The last time Brent crude oil prices reached such heights was 18 years ago, during the lead-up to a global financial crisis that threatened to interrupt the historic rise in oil prices. The current price increase reflects heightened demand in the North Sea, where traders have recently been offering record premiums for cargoes.

Unlike Dated Brent, futures for the benchmark Brent crude traded on the Intercontinental Exchange Inc. remained lower than 2022 levels, trading around $107 on Thursday, April 2. This discrepancy arises because Dated Brent reflects the price of oil for a different, more immediate delivery period.

Previously, it was reported that on March 22, 2026, U.S. President Donald Trump issued a 48-hour ultimatum to Iran regarding the reopening of the Strait of Hormuz, threatening strikes on Iranian power plants if they refused. On March 23, 2026, Trump instructed the Pentagon to delay strikes on Iranian power plants and energy infrastructure by five days, causing concern in the market.

On the morning of March 23, oil prices showed an increase as investors analyzed the escalating threats between the U.S. and Iran regarding energy facilities amid the arrival of millions of barrels of Iranian oil on the market following a temporary lifting of sanctions by Washington. Consequently, Brent crude futures rose by 65 cents to $112.84 per barrel, while U.S. West Texas Intermediate crude increased by 84 cents, reaching $98.75 per barrel.

Oil prices resumed their upward trajectory on March 31, 2026, after a pullback earlier in the trading session, following media reports that President Trump would like to conclude the war with Iran. This situation underscores the volatility in the oil market and the importance of geopolitical factors in shaping prices.