WTI discount to Brent widest since 2014 as US oil remains relatively insulated

The discount for WTI versus Brent has sharply widened this week, as the US grade remains relatively insulated from Middle East supply disruptions and geopolitical risk premiums, analysts said March 19.

Platts, part of S&P Global Energy, assessed prompt-dated WTI at a $12.63/barrel discount to prompt-dated Brent on March 19. The discount was the widest since January 2014, prior to the lifting of the US export ban that had been in effect since 1975.

Persian Gulf crude exports have slowed to a trickle, and regional benchmarks have surged to record highs as the Middle East war has effectively closed the Strait of Hormuz. With the war in its third week, buyers seeking alternative supply have created a ripple effect that has had an outsized impact on Brent prices, analysts said.

"Brent crude is feeling the heat far more than WTI because it's the global benchmark, tightly linked to seaborne Middle East oil," Price Futures Group analyst Phil Flynn said in a March 19 note, adding that WTI is sheltered due to strong US production "as well as the fact it's land it's land-based, US-centric, and far less exposed to [Persian] Gulf shipping chaos."

Inventories at the WTI delivery point of Cushing, Oklahoma, are expected to climb by 300,000 barrels in the week to March 20, S&P Global Energy CERA data showed, putting stocks at around 27.8 million barrels -- the highest since August 2024.

White House efforts to cap rising crude prices have also limited WTI gains, analysts said.

"WTI is effectively widening versus Brent because the Administration's policy response alleviates the US supply concerns to a certain extent," CIBC Private Wealth Managing Director Rebecca Babin said.

The US may lift sanctions on Iranian crude shipments currently on tankers at sea and could conduct a unilateral Strategic Petroleum Reserve release to keep prices down, US Treasury Secretary Scott Bessent said March 19.

The US previously agreed to a 172-million-barrel SPR release as part of an International Energy Agency coordinated release of 400 million barrels aimed at stabilizing global energy supplies. The White House has also taken other actions aimed at deflating crude prices, such as a 60-day suspension of the Jones Act and a 30-day waiver for the sale of sanctioned Russian crude.

Babin noted that these accommodations would only work in the short- to medium-term. "If this extends beyond April, those inventory draws are going to start seeping further and further abroad, and it will become harder to stay insulated," Babin said

A rush of export interest in US crude to Asia has pushed the premium for waterborne WTI MEH to a six-year high relative to WTI, creating an arbitrage that is likely to pull barrels from Cushing in the coming weeks.

Platts assessed WTI MEH at a $5.20/b premium to Cushing WTI on March 19, down 5 cents/b day over day, but up from a 90 cents/b premium on Feb. 27.

Fixtures pick up to Asia

As of March 19, roughly 6 million metric tons of crude have been fixed for future delivery to Asia from the USGC, up from 3 million mt in February and 4.5 million mt in January, Platts data shows.

Top Asia-Pacific buyers include, but are not limited to, South Korea, China, India, Japan, Australia, and most recently, Singapore. Roughly 1.5 million mt have been fixed for China, 1 million mt for South Korea, 540,000 mt likely to Singapore and 930,000 mt for Japan. Other tankers were fixed with more generic Asia, or East, destinations, with options for delivery into Europe.

Fixture activity spans across tanker classes, but crude shipments are often booked on VLCCs and Aframaxes. The indicated volumes represent the minimum amount of crude contracted on such ships from the USGC to Asia.

"Mars is too expensive," one USGC trader said, noting that over five VLCC's were booked to Asia on March 18.

The future deliveries would mark the first significant level of crude buying activity out of China, which had paused its imports of US crude in February 2025, though no current volumes have been recorded, according to data from S&P Global Commodities at Sea.