Oil prices: Hormuz supply shock widens gap between future and physical fuel

The Iran war has entered its fourth week and global oil markets are showing a clear split with actual fuel supply prices are rising much faster than widely tracked oil futures. Brent crude, the global benchmark, has jumped over 50% to around $112 a barrel following the near-complete closure of the Strait of Hormuz and attacks on energy infrastructure in the Middle East. But the cost of physical oil, which is refined into petrol, diesel and jet fuel, has risen even more sharply as supplies become harder to secure.

Refiners in Asia are now paying steep premiums above Brent to source cargoes from far-off regions, highlighting the shortage. But the impact is not limited to oil markets!