Brent premium hits four-year high, Strait of Hormuz stalemate triggers supply chaos.

After the United States launched an attack on Iran, global benchmark oil prices soared, leading to Brent crude futures hitting the highest level since 2022 against Middle East Dubai crude. According to brokers and traders, the futures and swap differentials, which measure the difference between the two, have exceeded $6 per barrel on Tuesday. In contrast, the differential was less than $2 for most of the week before the conflict broke out. Despite a sharp drop in Brent crude prices, trading in the Dubai benchmark price outside the market appears to be chaotic. The shipping in the Strait of Hormuz has come to a standstill, leading to interruptions in the flow of crude oil in the region, causing high uncertainty in supply and a significant decrease in trading activities in the Middle East. Another factor driving up prices is the skyrocketing freight rates - as idle tonnage capable of carrying the region's suppliers' continuous crude oil production becomes increasingly scarce within the rich oil and gas resources, the Morgan analyst Natasha Kaneva and others warned in the report, stating, "As the Strait of Hormuz remains paralyzed, time is ticking away: If the strait cannot be reopened within 21 to 25 days, upstream production may be forced to shut down."