WTI Discount to Brent Hits Widest Point in 11 Years Amid Middle East Tensions

The discount between U.S. crude futures and Brent has hit its widest point in 11 years, driven by Middle Eastern oil infrastructure attacks that have sent global benchmark prices soaring.

The spread between WTI and Brent reached $12.05 a barrel on Wednesday, the largest since March 2015, as Brent surged 3.8% due to Iran's threats against Gulf energy targets and its South Pars gas field attack.

Neil Crosby of Sparta Commodities said, 'Brent is ripping on South Pars; I think infrastructure attacks will be the main driver of more Brent rallies rather than anything else, and that tends to be reflected in Brent over WTI.'

The widening spread creates an arbitrage opportunity for traders looking to fetch a profit by moving oil to higher-priced markets. Even with freight prices increasing, the arbitrage remains open because the WTI/Brent spread is wide enough to offset the cost of freight.