Photo caption: A cargo ship in the Gulf, near the Strait of Hormuz, as seen from northern Ras al-Khaimah, near the border with Oman’s Musandam governance, amid the U.S.-Israeli conflict with Iran, in United Arab Emirates, March 11, 2026. REUTERS/Stringer/File Photo Purchase Licensing Rights
*Supply disruptions seen persisting despite ceasefire
*Physical crude prices hit records despite futures market slump
European and African crude oil prices climbed to fresh records on Wednesday, defying a sharp selloff in oil futures after a U.S.-Iran ceasefire was reached on Tuesday, as traders priced in a prolonged disruption to physical oil supplies.
The ceasefire announcement sent major benchmark Brent and WTI contracts tumbling 13% and 16% respectively on Wednesday to below $100 a barrel, as investors bet on the reopening of the Strait of Hormuz and a reduced geopolitical risk premium.
However, prices in the physical market have yet to decline and some have even risen. The outright price of a barrel of North Sea Forties crude FOT-E, opens new tab reached an all-time high of $146.43 a barrel on Thursday, according to LSEG data.
The divergence highlights strong from Asian and European refiners for non-Middle East barrels, driving up prices for prompt replacement crudes, such as those in Europe and Africa. It also shows that disruption is expected to persist.
“We are talking months before a return to the full supply chain, so certainly there will continue to be this big divergence between the physical and paper markets,” said Sparta Commodities analyst Neil Crosby.
PHYSICAL PREMIUMS HIT RECORDS
Iran’s continuing near-closure of the Strait of Hormuz and attacks on regional states’ energy infrastructure have also pushed the premiums at which crude oil cargoes trade to all-time highs.
Forties trades at a premium or discount to dated Brent BFO-, opens new tab, a physical benchmark for prompt cargoes. Dated Brent is trading almost $27 above June Brent futures, according to LSEG data, and Forties hit a record premium of $20.25 to dated Brent on Wednesday.
“The reaction [on futures prices] is expected, but we do not expect it will quickly translate into a material change in physical flows or production,” consultancy Energy Aspects said,
It added that a temporary two-week ceasefire meant operators will not restart refineries and fields due to the risk of renewed shutdowns.
In the North Sea, other major grades Brent, Oseberg, Ekofisk and Troll were also bid to fresh record premiums on Wednesday. U.S. WTI Midland crude delivered to Europe traded at a $20.70 premium to dated Brent on Wednesday, also the highest ever.
=== Reuters ===
