Brent-WTI Spread Hits 2022 High on Hormuz Strait Pause

SECAUCUS, NJ (DTN) – The spread between global crude benchmarks Brent and WTI widened to its highest in almost four years on Monday (3/2) amid price volatility caused by heightened military activity across the Middle East and OPEC’s intervention to provide a supply cushion.

Crude and product futures skyrocketed as much as 12% Monday (3/2) as U.S.-Israeli air strikes pounded Iran and Tehran responded by firing missiles at neighboring capitals in the region. Prices also surged as tanker traffic through the Strait of Hormuz, which straddles Iran and serves as passage to about 20% of world petroleum cargoes, ground to a virtual standstill.

ICE Brent crude for May delivery surged to $82.37 bbl, its highest since a January 2025 peak of $82.63, as Iranian missiles and drones directly targeted civilian and economic hubs including Dubai, Abu Dhabi, Manama, Doha and Kuwait City. The U.S.-Israeli campaign had earlier killed 48 senior Iranian leaders, including the country’s Supreme Leader Ayatollah Ali Khamenei. Brent retraced its peaks later, touching a session low of $75.75 bbl.

NYMEX WTI for April delivery hit a nine-month high of $75.33 bbl before retreating to $69.20 at the lows.

The price action widened the Brent-WTI spread to $7 bbl, compared to the $5.80 level recorded Friday (2/27) and the $6 average so far this year.

It essentially matched the spread from nearly four years ago, when Brent and WTI stood apart by $7 bbl in May 2022, in the aftermath of Russian’s invasion of Ukraine that began in February that year. In July 2022, the spread widened to around $13 on supply shocks caused by sanctions imposed on Russian oil pursuant to the invasion.

Prior to the Iran and Ukraine crises, the highest the spread had gotten was in September 2011, when the gap reached nearly $30 bbl as the U.S. shale revolution then produced crude faster than the existing pipeline infrastructure could move it from the Cushing, Oklahoma hub to Gulf Coast refineries.

Monday’s widening of the spread was driven by Brent’s heavier exposure to sea-borne disruption in the Hormuz, underscoring the market’s immediate fear as the world’s most vital oil artery remains effectively closed to maritime commerce. WTI, meanwhile, was supported by steady domestic demand and the role of U.S. exports as a safety valve for global markets.

The rally this morning was the largest single-day surge in oil prices since the onset of the Russia-Ukraine conflict four years ago.

The Organization of the Petroleum Exporting Countries (OPEC) contributed to the market’s retreat later by pledging to raise production.

OPEC and its allies, known as OPEC+, agreed Sunday (3/1) to increase production by 206,000 bpd in April, signaling a strategic end to the output pause held during the first quarter.

U.S.-Israeli strikes against Iran initially triggered a rush for long positions, with the fear of a potential 1.6-million bpd export disruption from Iran driving the upside. Iran exports nearly 80%-90% of its total international sales to China.

While Iran’s total production is roughly 3.3 million bpd, nearly half is consumed by domestic refineries to meet internal demand. The 1.6 million-bpd entering the global market is what speculators fear could be knocked offline by direct hits or a blockade to Hormuz.

While global inventories offer a temporary supply cushion, analysts warn that spare production capacity cannot bridge the sizable supply deficit caused by a sustained blockade of the strait.

“Some 15 million bpd of crude oil and 5 million bpd of petroleum products transit the narrow passageway daily, and options to reroute oil flows to ports not in the Persian Gulf, like Saudi-Arabia’s East-West pipeline which connects production to the Red Sea, are severely limited,” DTN analyst Karim Bastati said.