Iran War Premium Pushes Some Oil Products to Over $200 a Barrel
Source: Bloomberg
March 20, 2026 at 1:41 PM EDT
Updated on March 21, 2026 at 7:00 AM EDT
Three weeks into the Iran war, there’s an ever-growing gap between the price of oil futures and supplies that determine costs for consumers in the real world.
The global Brent benchmark has jumped more than 50% to around $112 a barrel as the near-complete closure of the Strait of Hormuz and attacks on Middle East energy facilities choke supplies. But the cost of almost every physical barrel is surging even more, as tight supplies boost prices of products that consumers actually use, like gasoline, diesel and jet fuel.
Refiners in Asia, the top consuming region, are buying cargoes from thousands of miles away at eye-watering premiums to Brent as they try and secure whatever supplies are available. Trucking companies are starting to feel the impact of higher fuel costs and some parts of the world are crimping purchases of fuels that power ships. With jet fuel prices above $200 a barrel, major European airlines say passengers will have to bear the extra costs.
The disconnect between futures — which are underpinned by hundreds of billions of dollars of daily transactions — and physical oil is partly due to aggressive US attempts to keep a lid on prices, including through releasing emergency supplies. The reality is that the global economy is suffering from a bigger inflationary hit than futures suggest, something that’s piling pressure on central bankers and the Trump administration before the November midterm elections.
Read more: https://www.bloomberg.com/news/articles/2026-03-20/the-oil-prices-you-see-don-t-tell-the-market-s-real-story?srnd=homepage-americas
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