The Brent-WTI Spread is Mysteriously High

The two most widely traded oil benchmarks are West Texas Intermediate and Brent Crude. WTI is the benchmark for North American crude oil while Brent is the benchmark for Europe and the Middle East. The two grades are very close in quality, and historically have traded at very similar prices.

However, the spread between WTI and Brent started widening in 2017, and by early this year traders were largely united in suggesting that we’d reached a peak and it was time to become bearish on Brent. They were wrong:

The Brent-WTI spread did indeed start to narrow in March, but only for a short while. In May the spread took off like a rocket and currently stands at nearly 22 percent. This is a historical high aside from the period following the Arab Spring, when fears about Arab oil supply drove Brent prices well above WTI. Today, though, there’s nothing like the Arab Spring to explain what’s happening. There have been some vague notions floating around that Iran might try to close the Hormuz Strait, but nothing that seems very serious. And WTI inventories are up a bit, but not by enough to really explain anything.

So what’s going on? And does it mean anything serious?

THIS IS BIG FOR US.

And we won't beat around the bush: Our fundraising drive to finish our current budget on June 30 and start our new fiscal year on July 1 is lagging behind where we need it to be.

If you value the reporting you get from Mother Jones and you can right now, please consider joining your fellow readers with a donation to help make it all possible. Whether you can pitch in $5 or $500, it all matters.

If you're new to Mother Jones or aren't yet sold on supporting our nonprofit reporting, please take a moment to read Monika Bauerlein's post about our priorities after these chaotic several years, and why this relatively quiet moment is also an urgent one for our democracy and Mother Jones’ bottom line—and if you find it compelling, please join us.

payment methods

THIS IS BIG FOR US.

And we won't beat around the bush: Our fundraising drive to finish our current budget on June 30 and start our new fiscal year on July 1 is lagging behind where we need it to be.

If you value the reporting you get from Mother Jones and you can right now, please consider joining your fellow readers with a donation to help make it all possible. Whether you can pitch in $5 or $500, it all matters.

If you're new to Mother Jones or aren't yet sold on supporting our nonprofit reporting, please take a moment to read Monika Bauerlein's post about our priorities after these chaotic several years, and why this relatively quiet moment is also an urgent one for our democracy and Mother Jones’ bottom line—and if you find it compelling, please join us.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate