Finance
US Crude Premiums Climb to Record Levels as Asia, Europe Compete for Supply
Published by Global Banking & Finance Review®
Posted on April 6, 2026
3 min readLast updated: April 6, 2026
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US WTI Midland spot premiums surged to record highs—up to $30–$40/bbl for North Asia and ~$15/bbl for Europe—as Asian and European refiners compete fiercely amid Middle East supply disruptions from the Strait of Hormuz crisis and Iran war.
US Crude Premiums Reach Historic Highs as Asia, Europe Compete for Supply
Record US Crude Premiums Driven by Global Supply Competition
By Florence Tan and Siyi Liu
SINGAPORE, April 6 (Reuters) - Spot premiums for U.S. West Texas Intermediate crude have jumped to all-time highs as competition between Asian and European refiners for supply heats up to replace Middle Eastern oil flows disrupted by the Iran war, industry sources said.
Escalating Competition for US Crude
Europe is typically the largest importer of U.S. crude, but competition has escalated with Asian buyers scouring for supply from the Americas to Africa and Europe to replace Middle Eastern oil that is unable to move through the Strait of Hormuz.
The jump in crude prices is driving up costs and widening losses for refiners on both continents, sources and analysts said, putting severe pressure on companies including state-owned firms that are required by governments to keep producing fuel for national security.
Asian Refiners Intensify Bidding
"Asian refiners, shut out of Middle Eastern supply, are bidding aggressively for every available Atlantic Basin barrel," said Paola Rodriguez-Masiu, chief oil analyst at Rystad Energy, in a note dated April 3.
Spot Premiums Surge to Unprecedented Levels
'EVERY DAY THERE'S A NEW PRICE'
Offers for WTI Midland crude delivered to North Asia in July on very large crude carriers had premiums of $30 to $40 a barrel, depending on the benchmark used, traders said.
One trader pegged the premium at $34 a barrel to Dubai quotes while another put it at $30 a barrel above dated Brent. Two others said offers have gone closer to $40 a barrel above an August ICE Brent basis.
Those levels are up from premiums of close to $20 a barrel for deals concluded in late March and early April, when Japanese refiners including Taiyo Oil purchased WTI crude, traders said.
Market Volatility and Refiner Losses
"Every day there's a new price," one of the traders said, adding that Asian refiners face severe losses from the premiums.
Another trader said refiners would be better off reducing crude runs and buying products - if anyone is offering.
Impact of Futures and Freight Rates
Spot premiums jumped after the prompt monthly spread for WTI futures hit its widest backwardation on Thursday. Backwardation refers to when prompt prices are higher than those in future months.
Wider discounts on U.S. crude oil compared with global benchmark Brent have also spurred demand for tankers on the U.S. Gulf Coast, reducing vessel availability in the region and driving up freight rates.
European Refiners Face Record Premiums
In Europe, bids for WTI Midland delivered to the continent climbed to a record premium of close to $15 a barrel against dated Brent on Thursday. [CRU/E]
Profitability Challenges for European Refiners
"At current physical differentials and freight rates, European refiners buying spot crude cannot make money running those barrels through their systems," Rodriguez-Masiu said.
(Reporting by Florence Tan and Siyi Liu in Singapore; Editing by Thomas Derpinghaus)
Key Takeaways
- •Spot premiums for U.S. WTI Midland crude to North Asia have jumped to $30–$40 per barrel, up sharply from around $20 just weeks earlier, as Asian refiners scramble for Atlantic Basin barrels to replace disrupted Middle Eastern flows. (en.wikipedia.org)
- •Europe is also bidding aggressively, with premiums for WTI Midland delivered to the continent reaching record levels of nearly $15 per barrel over dated Brent, hammering refining margins. (en.wikipedia.org)
- •The Strait of Hormuz crisis triggered by the Iran war has severely disrupted global seaborne oil trade, driving volatility, backwardation in futures markets, soaring freight rates and insurance costs, which are exacerbating premiums and driving refiner losses. (en.wikipedia.org)
References
Frequently Asked Questions about US crude premiums climb to record levels as Asia, Europe compete for supply
1Why are US crude premiums at record levels?
US crude premiums have surged due to increased competition between Asian and European refiners seeking alternatives to Middle Eastern oil disrupted by the Iran war.
2How are Asian and European refiners responding to oil supply disruptions?
Asian and European refiners are aggressively bidding for US crude, raising premiums and increasing tanker demand, as they attempt to secure alternative supplies.
3What impact do high US crude premiums have on refiners?
The elevated premiums are increasing costs and causing significant losses for refiners, especially those required to continue fuel production for national security.
4What factors are driving up freight rates in the US Gulf Coast?
Wider discounts on US crude compared to Brent have increased tanker demand, reducing vessel availability and raising freight rates in the region.
5How high have spot premiums for WTI Midland crude reached?
Spot premiums for WTI Midland crude delivered to North Asia in July have reached between $30 and $40 a barrel above various benchmarking prices.
