Brent crude oil futures surged past $140, hitting a new high since 2008! The continued blockade of the Strait of Hormuz triggers a supply chain crisis.

The global crude oil spot market has recently experienced significant volatility. Driven by geopolitical conflicts in the Middle East, the price of Dated Brent crude oil has surged. As of April 2nd, the benchmark spot price had broken through the $140 mark, reaching a new high of $141.37, the highest since the 2008 financial crisis. This astonishing surge in spot prices far outpaced futures prices during the same period, highlighting the extremely tight global physical crude oil supply.

Significant spot premiums fuel fierce competition among refiners.

Brent crude oil is one of the most important spot benchmarks in global crude oil trading, primarily reflecting the physical delivery value within the next 10 to 30 days. Compared to futures, it more accurately reflects the actual available crude oil supply in the market. Data as of April 2nd shows that while spot prices surged past $141, the most active Brent futures contract hovered only around $107 to $109. This dramatic "backwardation" indicates that refiners are fiercely competing for the limited physical supply of crude oil.

The Strait of Hormuz has been closed for over a month, triggering a supply chain crisis.

The core driver of this surge in oil prices stems from the continued blockade of the Strait of Hormuz. Since the conflict erupted due to the US-Israel military action against Iran, this crucial waterway, carrying approximately one-fifth of the world's oil shipments, has been closed for over a month. Exports from major Middle Eastern oil-producing countries, including Saudi Arabia, the UAE, and Iraq, have been severely hampered.

The International Energy Agency (IEA) described this as "one of the most severe oil supply disruptions in history." With pre-war oil reserves gradually depleted, Brent crude oil saw an unprecedented surge in March, and the upward trend continued into April.

Inflation warnings sound again, potentially impacting the overall economy.

High oil prices will inevitably push up global inflationary pressures, particularly impacting operating costs in the energy, transportation, and chemical industries. At the macroeconomic level, central banks (such as the Federal Reserve) will face increasingly difficult monetary policy decisions given the risk of a resurgence of inflation. Analysts warn that if the Strait of Hormuz remains closed for an extended period, oil prices could potentially rise further to $150 or even higher.

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