Physical oil prices surge near $150: What’s happening with Brent crude and African crude prices, and why physical oil hits $150 as Europe pays record premiums amid Strait of Hormuz disruption and global supply shock fears
Unlike futures contracts, physical oil prices represent real-time cargo availability. Buyers pay a premium for immediate delivery due to shipments being delayed or blocked. This pushed North Sea Forties crude oil to record levels, surpassing even the peak of the 2008 oil crisis. The ongoing geopolitical conflict involving Donald Trump and the Iranian leadership has further increased uncertainty and kept physical oil prices high.
Why are physical oil prices rising faster than Brent crude oil?
Physical oil prices are rising sharply because they reflect actual supply shortages, not future expectations. Brent crude futures remain well below physical cargo prices, up 6%. This difference shows how urgent demand outstrips available supply.
European and Asian refiners are bidding aggressively for alternative crude sources. Due to the disruption of Middle East shipments, they turn to North Sea and African grades. This sudden change caused physical oil prices to rise to unprecedented levels. Dated Brent, the benchmark for immediate delivery, is currently trading above $20 in futures contracts.
Moreover, logistical constraints make the situation worse. Tanker availability is shrinking, insurance costs are rising and delivery times are uncertain. Collectively, these factors are pushing physical oil prices even higher as buyers compete for limited cargoes that can arrive quickly.
How is the Strait of Hormuz crisis increasing physical oil prices?
The Strait of Hormuz controls approximately 20% of global oil supply, making it one of the world’s most critical energy chokepoints. Any disruption here would have immediate global consequences. Since fighting began in late February, the virtual closure of the strait has restricted the flow of oil from major producers.
The US naval blockade aimed at limiting Iran’s exports further exacerbated the crisis. As a result, oil shipments to Europe and Asia fell sharply. This supply shock directly fueled the rise in physical oil prices as markets reacted to real-time shortages rather than speculative risks. Despite ceasefire talks, traders expect the disruptions to continue. Energy companies warn it could take weeks, if not months, for supply chains to return to normal. This prolonged uncertainty causes physical oil prices to remain high and volatile.
In addition to physical oil prices, jet fuel and diesel prices are also increasing
The increase in physical oil prices is not limited to crude oil only. There are also sharp increases in refined products such as jet fuel and diesel. Jet fuel prices are approaching $200 per barrel; This is almost double pre-crisis levels. Diesel prices in Europe have risen to around $170 per barrel, reflecting severe supply constraints.
Europe’s dependence on imports is an important factor. More than 60% of jet fuel imports in 2025 came from the Middle East. With these supplies disrupted, the continent faced critical famine. Industry groups warn that airports could run out of jet fuel within weeks if the crisis continues.
This underlines how rising physical oil prices are reflected in the entire energy chain. Higher crude oil costs directly lead to increased fuel prices and impact transportation, aviation and manufacturing sectors globally.
Will physical oil prices reach $150 or rise even higher?
Market analysts believe that physical oil prices could soon exceed $150 if the crisis escalates further. Some traders suggest that continued disruption in the Strait of Hormuz could push prices above historic highs.
The main reasons for this situation include ongoing geopolitical tensions, limited spare production capacity and strong demand from Asia. Physical oil prices may remain high for a long time if alternative supply routes cannot compensate for the loss of exports in the Middle East.
Additionally, premiums for alternative raw grades are already at record levels. Nigerian and US oil shipments to Europe are trading significantly above reference prices. This shows that the market expects tight supply conditions to continue.
Rising physical oil prices have far-reaching effects on the global economy. Higher energy costs increase inflation, reduce consumer spending and strain industrial production. Airlines, logistics companies and manufacturers are among the most affected sectors.
For consumers, this impact will be felt through increased fuel prices, increased transportation costs, and increased commodity prices. Governments may face pressure to intervene by releasing strategic reserves or imposing price controls.
Financial markets are also reacting to the increase in physical oil prices. While energy stocks are rising, fuel-dependent sectors are under pressure. Investors are closely watching developments in the Middle East as any rise could trigger further volatility.
FAQ:
Q1. Will physical oil prices hit $150 per barrel during the Strait of Hormuz crisis? Physical oil prices are currently trading around $150 due to real supply shortages and disruption of shipping routes. As the Strait of Hormuz crisis continues, refineries are paying premiums for urgent cargoes. If tensions increase or supply remains blocked, physical oil prices could surpass $150 and remain high.
Q2. Why are physical oil prices rising faster than Brent crude futures?
Physical oil prices reflect real-time demand and immediate delivery needs, unlike futures that track expectations. Due to limited cargo availability and strong demand from Europe and Asia, buyers are bidding aggressively. This supply-demand imbalance pushes physical oil prices significantly above Brent crude oil benchmarks.
