Over the past two months, disruptions caused by the situation in the Middle East have heightened the risk of interruptions to spot crude oil supplies. Spot premiums skyrocketed, with North Sea crude prices briefly surpassing their 2008 highs. As buyers proactively controlled volumes, drew down inventories, released strategic reserves, and supplemented with non-Middle Eastern sources, spot crude prices retreated significantly from their peaks, returning spreads to normal ranges. However, Standard Chartered Bank warned that the current cooling of the spot market is merely a short-term buffer; once restocking demand is concentratedly released and refinery operations rebound, if there is no resolution to the U.S.-Iran tensions, spot crude prices will surge again.
The United States has become the biggest winner of this round of the energy crisis by boosting crude oil exports, while the supply landscape for aviation fuel in Europe and America has also undergone structural adjustments.
Spot Crude Oil Prices Experience Volatile Swings as High Premiums Rapidly Return to Normal
Following the escalation of the Middle East conflict and Iran’s blockade of the Strait of Hormuz, the market rushed to purchase non-Middle Eastern prompt crude oil, driving spot premiums sharply higher. In mid-April, the price of Forties crude in the North Sea surged to nearly $150 per barrel, surpassing its historical peak in 2008. While the market initially expected futures to converge toward spot prices, the trend reversed, with spot prices actively retreating toward futures.
As of May 11, the North Sea prompt Brent crude premium over the nearest-month contract had narrowed to just $0.43, with the weekly spread contracting sharply by $11.31. Although Saudi Aramco’s official selling prices remain at historically high levels, after posting the largest-ever monthly increase in May, prices for June were proactively reduced for Europe and Asia, indicating clear signs of short-term market cooling.
Multiple Buffering Factors Suppress Spot Market Dynamics as High Volatility Increases Market Risks
The sharp decline in spot crude oil premiums, with some categories dropping by up to 90%, was primarily due to buyers deliberately delaying high-price lock-ins, drawing down commercial inventories, and increasing supplies from non-restricted production areas. The market generally remains on the sidelines, awaiting signs of easing U.S.-Iran tensions and the reopening of the Strait of Hormuz, unwilling to chase higher prices.
Intraday volatility in the crude oil market has been exceptionally severe, with daily price swings often exceeding $10 per barrel. On March 9, the intraday fluctuation range for the nearest-month Brent crude reached as high as $35, exacerbating the impact on portfolio risk values. Buyers have collectively suppressed further price surges by delaying purchases, scheduling early maintenance of refineries, reducing operating rates, and coordinating global strategic reserve releases.
Institutional Forecast Indicates Potential Market Reversal with Risks of Another Price Surge Ahead
Standard Chartered Bank analysis suggests that the current low-price environment is unlikely to persist. If the U.S.-Iran conflict remains unresolved, as buyers can no longer defer restocking, refineries gradually increase operating rates, and global strategic reserve releases approach their conclusion, spot crude prices will resume their upward trajectory, pulling futures prices closer to spot highs, setting the stage for another wave of price increases.
US crude oil exports hit a record high, emerging as a key alternative in global supply.
In the current energy crisis, the United States has become the biggest beneficiary. Data from the US Energy Information Administration (EIA) shows that as of April 24, 2026, US daily crude oil exports surged to 6.4 million barrels, setting a new historical record, with combined daily exports of crude oil and refined products reaching 12.9 million barrels. Eurasian refineries have increased purchases of light US shale oil to replace stranded crude supplies from the Persian Gulf.
Multiple Asian countries have significantly ramped up purchases of US oil. Simultaneously, the US has tapped into both commercial inventories and strategic petroleum reserves, releasing reserve crude oil in batches and coordinating with the International Energy Agency (IEA) to complete the deployment of approximately 400 million barrels globally, effectively compensating for the supply gap in the Middle East.
Relaxation of aviation fuel regulations reshapes supply; divergence emerges in EU-US inventory dynamics.
The European Union Aviation Safety Agency (EASA) relaxed aviation fuel specifications, allowing widespread use of US-grade aviation fuel across Europe, breaking traditional specification constraints and broadening supply channels while reducing reliance on the Middle East. Due to its characteristic properties, this type is more suitable for short- to medium-haul low-altitude routes, which also contributed to a decline in aviation fuel price spreads from elevated levels, shifting the futures structure to a contango pattern.
US aviation fuel inventories remain seasonally high, with inventory levels above the five-year average as of May 1. In contrast, core storage regions in Europe have experienced rapid inventory depletion, plummeting from around 1.1 million tons to 560,000 tons, gradually highlighting regional supply tightness.
Summary
Overall, the pullback in spot crude prices reflects a confluence of short-term factors such as buyer hesitancy, inventory drawdowns, and the influx of alternative supplies, rather than a fundamental improvement in supply-demand dynamics. Against the backdrop of rising refinery operations, approaching restocking needs, and the nearing conclusion of strategic reserve releases, spot oil prices could resume their upward trajectory at any time unless there is a breakthrough in geopolitical developments. The rise of US crude oil exports is reshaping the global supply landscape, while diverging aviation fuel inventories in Europe and the US also signal potential volatility in oil product markets ahead.
Brent Crude Oil July Contract Daily Chart Source: Yihuotong
As of 13:28 Beijing Time on May 14, the Brent Crude Oil July Contract was trading at $106.16 per barrel.