Global benchmark Brent crude traded at $97 per barrel Tuesday while refinery acquisition costs soared to $133, creating a record $36 price gap that analysts attribute to tightening physical supply chains and geopolitical risks. The widening spread reflects growing disconnects between paper markets and actual fuel production economics.
Market data shows this is the largest differential since Brent futures launched in 1988, surpassing previous extremes during the 2008 financial crisis and 2020 negative oil prices. Sources at three European refineries confirmed paying $130+ for November deliveries, with one trader calling it “an operational necessity, not speculation.”
The divergence stems from collapsing OPEC+ spare capacity and Western sanctions on Russian exports, forcing refiners to compete for dwindling medium-sour crude supplies that comprise most global refining capacity. “This isn’t just about the headline Brent number,” said a Singapore-based analyst. “The physical market is screaming scarcity while futures markets still price in recession risks.”
Forward curves suggest the gap may persist through winter heating season. Energy Aspects forecasts refinery margins could widen further if EU sanctions on Russian petroleum products take full effect in February 2023.