U.S. oil prices, supported by dual guarantees, see a pullback, while European and Asian oil prices surge to 107 dollars but struggle to hold the line alone

The US spot crude oil price has significantly retreated from its previous surge, while oil prices in Europe and Asia continue to hit record highs nearly seven weeks into the Iran conflict. The effective paralysis of the Strait of Hormuz and damage to regional facilities have caused global oil flows to become chaotic, with Eurasian benchmark crude reaching nearly $170 per barrel at its peak.

The United States leverages its status as the world’s largest oil producer as a dual buffer. About 172 million barrels of medium sour oil from the Strategic Petroleum Reserve have been directly injected into the Gulf of Mexico market, and institutional data show that such operations have historically put downward pressure on local benchmark prices.
The resumption of Venezuelan crude oil imports serves as another critical stabilizer. In the first quarter, US daily imports of Venezuelan crude averaged 295,000 barrels, a 14% year-on-year increase and the highest single-quarter level since Q4 2018. The released reserve oil and Venezuelan supplies are both medium sour grades, directly filling the demand gap for refineries in the Gulf of Mexico.
The price divergence is extremely sharp. Mars medium sour crude was quoted at about $97 per barrel on Wednesday, down nearly 25% from the $128.70 peak on April 2. In contrast, European spot prices approached $150 this week, and Middle Eastern Dubai benchmark soared to nearly $170, becoming the world’s most expensive reference price.
ICIS analysts note that Eurasian buyers are in urgent need of prompt spot supplies, while US refiners hold supply-side control and act as price setters rather than price takers during the crisis. Sparta Commodities adds that the combination of reserve releases, Venezuelan supply, and elevated freight risks on Eurasian routes collectively suppresses premiums in the US physical market.
The export-oriented WTI Midland saw its premium over Brent reach a record $22.80 per barrel on Tuesday, as European refineries scrambled for Middle East substitutes. Rystad Energy highlights that Mars is mainly consumed domestically with minimal exports, so international bidding pressure is mainly channeled toward WTI grades. If European supply shortages widen further in the future, WTI-related grades may once again face upward premium pressure.