Dated Brent, the price of crude for physical delivery within 10 to 30 days, hit a record $154 a barrel on October 5 and was still above $149 on October 9, according to Seoul Economic Daily citing London Stock Exchange Group data. Brent futures settled at $104.72 on October 9, a gap of about $45, and the gap exceeded $50 at its widest the week before. Buyers are paying a large premium for barrels they can load now, and the futures market is pricing a Strait of Hormuz that eventually reopens.
The diplomacy gives futures little to lean on. Iran's security chief Mohsen Rezaei said on October 11 that the U.S. response to Tehran's reopening proposal was "insufficient" and that no negotiations would take place until Iran's conditions are met, according to Reuters. Six commercial vessels were struck on October 11, according to gCaptain, and the threat level in the strait stayed at severe.
Futures Price a Reopening That Physical Buyers Will Not Wait For
The futures curve has inverted, with nearby contracts priced above later ones, and futures have risen only modestly because markets still expect Hormuz traffic to resume, according to Seoul Economic Daily. Goldman Sachs raised its December Brent forecast to $90 from $85 and estimates a risk premium of just over $20 a barrel. Its base case is that continued adaptation of Mideast supply will eventually reduce prices, and it describes renewed escalation as a significant net upside risk.
The gold line is the EIA Europe Brent spot price and the dark line is the Cushing WTI spot price, both through October 6, the latest date the EIA series carries. The EIA Brent series is compiled differently from the LSEG Dated Brent assessment cited in the text, which was higher. Source: U.S. Energy Information Administration.
The EIA series shows the same split in a narrower form. Brent spot rose from $97.59 on September 2 to $125.44 on October 6, with a peak of $135.51 on October 2, while WTI spot held between $85 and $108 and closed the series at $96.24. The spread between the two widened from $5.44 to $29.20. The EIA figures run below the LSEG Dated Brent assessment, but both show physical crude detaching from its benchmarks.
Diplomacy and Attacks Point the Same Way
Iran proposed at the UN General Assembly that the strait could reopen within seven days if its conditions were met, and Washington replied through Qatari intermediaries, according to Reuters. Rezaei said Iran is "no longer in the process of responding to the Americans." Attacks have spread to anchorages and inside the Persian Gulf, according to gCaptain, and on October 10 U.S. forces disabled the bulk carrier Ocean Molica in the Gulf of Oman after it allegedly tried to evade a U.S. blockade of Iranian shipping.
The traffic numbers show the cost. IMF PortWatch recorded 4 transits on October 4 against a pre-crisis baseline of 85 a day, while U.S. Navy-linked data showed about 29 a day over the prior 72 hours against a historical average of roughly 138. The two counts use different baselines, and both describe a waterway running far below normal. Houthi strikes on Riyadh's airport on October 10 killed at least 13 people, according to EnergyNow, widening the conflict beyond the strait.
Canada Sits at the Wrong End of the Spread
Western Canadian Select for November delivery at Hardisty settled at a US$25.55 discount to WTI, the widest since 2023, according to Calgary brokerage CalRock via Reuters as reported by EnergyNow. With WTI settling at US$91.85 on October 9, that implies Western Canadian Select near US$66, against $104.72 for Brent futures and more than $149 for Dated Brent.
The discount matters as much as the benchmark for a heavy-oil producer, because the realized price is the benchmark minus the differential. A global squeeze that lifts Brent can leave Canadian heavy barrels with a smaller share of the gain when the differential widens at the same time. The variables to watch are the Qatari channel between Washington and Tehran, the shipping threat level in the strait, and whether the futures curve moves toward the physical market or the reverse.