$40+ Price Gap Emerges Between Persian Gulf and Non-Hormuz Crude Grades
The ongoing conflict in the Persian Gulf has created a significant price disparity between crude oil grades, with those needing to pass through Hormuz trading at steep discounts compared to safer alternatives. Iraq's Basrah Medium is currently offered at a $43 discount per barrel against the Murban benchmark due to risks associated with transporting oil from the region. Meanwhile, Murban—loaded outside of Hormuz—is priced above $127 per barrel. Tanker movements through the Strait of Hormuz remain subdued following recent attacks, but once crude exits this dangerous chokepoint, prices rise as demand remains resilient despite high costs. Outside the Gulf, oil blends like Australia's Pyrenees have surged to over $138 per barrel due to strong global demand and geopolitical shifts. Russian ESPO blend is also seeing a premium over Brent as Chinese refiners seek alternatives to Iranian crude blocked by U.S. naval actions in Hormuz. The conflict shows no signs of abating, with the oil price gap likely to widen further.
