Iran War Disrupts Global Oil Markets, Widening Brent-WTI Spread

The West Texas Intermediate (WTI) and Brent Crude are two major benchmarks in the oil market, but they have distinct differences that affect their pricing. WTI is primarily sourced from US fields in Texas, Louisiana, and North Dakota, while Brent is a blend of oils from the North Sea.

WTI is considered 'light' and 'sweet', meaning it has low density and low sulfur content, making it easier to refine. In contrast, Brent has slightly higher sulfur levels than WTI. The two benchmarks trade on different platforms: WTI futures are traded on the NYMEX in New York, while Brent futures are traded primarily on the ICE in London.

The ongoing war involving Iran has significantly impacted the oil market, causing a widening gap between Brent and WTI prices. As of March 2026, Brent has surged to $114.91 per barrel, compared to WTI's $97.30. The closure of the Strait of Hormuz, which accounts for approximately 20% of global oil supply, has added a 'geopolitical risk premium' to Brent.

The US remains somewhat insulated from the conflict due to its domestic production and landlocked nature, but increased U.S. production and the Jones Act waiver have helped stabilize domestic supply even as international markets face a severe shock. The widening spread between Brent and WTI has reached $10-$20 per barrel, its largest gap in years.