Asia and Europe are in a buying spree—U.S. crude is flying off the shelves…

Industry insiders say the spot premium for U.S. WTI crude has surged to an all-time high, as refiners in Asia and Europe scramble fiercely for supplies to replace disrupted Middle Eastern oil flows stemming from the conflict with Iran.

 

Europe has long been the biggest buyer of U.S. crude, but competition has intensified sharply as Asian refiners, locked out of Middle Eastern oil shipments through the Strait of Hormuz due to the fighting, have been scouring the Americas, Africa and Europe for alternative cargoes.

 

Industry sources and analysts warn that the skyrocketing crude prices are driving up costs and widening losses for refiners in both regions, piling intense pressure on these companies—including state-owned firms—even as governments require them to keep producing fuel to safeguard energy security.

 

Paola Rodriguez-Masiu, chief oil analyst at Rystad Energy, said in an April 3 report: “Asian refiners shut out of Middle Eastern supplies are bidding aggressively for every available barrel of crude in the Atlantic Basin.”

A new price every single day

Traders report that premiums for WTI Midland crude bound for North Asia via very large crude carriers (VLCCs) for July delivery have hit $30–40 a barrel, depending on the benchmark used for comparison.

 

These levels mark a further jump from deals struck in late March and early April, when Japanese refiners including Japan’s Sunoco purchased 2 million barrels of U.S. WTI crude for July delivery via tenders at a premium of nearly $20 a barrel.

 

“There’s a new price every day,” one trader said, adding that Asian refiners are racking up heavy losses from the steep spot premiums.

 

Another trader suggested refiners would be better off cutting crude runs and buying finished products—if anyone is willing to sell them.

 

In Europe, WTI Midland crude for delivery to the European mainland traded at a record premium of nearly $15 a barrel over Brent crude last Thursday.

 

Rodriguez-Masiu noted: “At current physical differentials and freight rates, European refiners buying spot crude simply cannot make money processing it through their systems.”

WTI flips above Brent

Signs are mounting that U.S. crude has become an increasingly prized source of reliable supply as Middle Eastern oil struggles to move freely. Many investors have likely already noticed: U.S. WTI crude futures surged above Brent crude futures last week.

 

Historically, WTI has traded at a premium to Brent only very rarely.

 

As market analyst Julianne Geiger points out, part of this shift is technical: the front-month WTI contract still reflects May delivery, while Brent has rolled over to June, distorting the price relationship between the two benchmarks.

 

But the deeper driver is likely extreme near-term pressure—with WTI’s backwardated structure soaring to record levels, signaling urgent demand for secure, deliverable crude.

 

As uncertainty over global shipping routes grows, WTI has effectively gained a “security premium,” narrowing and even reversing its usual discount to Brent.

 

This price inversion suggests the normal price signals tied to physical oil flows in the crude market may have broken down.