Iran War Drives Deeper Oil Shock Than Prices Reveal
The New York Times • • business
Key Points:
- There are two main prices for oil: the Brent futures price commonly cited in the U.S. and Europe, and the spot price for immediate delivery of physical oil, which can differ significantly.
- As of Tuesday, Brent futures were around $109 a barrel, below the 2022 peak of over $130, but the spot price for physical oil on tankers reached nearly $145 a barrel, a record high.
- The large gap between futures and spot prices indicates that the futures market may underestimate the current supply shock caused by geopolitical tensions, particularly the conflict involving Iran.
- The spot price surge reflects the high cost and urgency of obtaining actual oil shipments quickly, highlighting supply chain pressures not fully captured by futures contracts.
