Oil markets moved into extreme short-term scarcity on Thursday as prompt U.S. crude futures jumped to their highest-ever premium over the next-month delivery. Traders rushed to secure barrels after U.S. President Donald Trump vowed to press further attacks on Iran.
West Texas Intermediate (WTI) futures for May delivery were trading about $15.70 per barrel higher than the June contract during the session. That gap - a pronounced example of backwardation, where near-term barrels command a premium over later deliveries - signals market expectations of tighter supplies in the immediate term.
Market participants interpreted the move as a scramble for immediate physical barrels following Mr. Trump’s Wednesday evening remarks. In that speech the president pledged to hit Iran "extremely hard" in the next two to three weeks, but did not present a plan to re-open the Strait of Hormuz. He has recently suggested other nations should take the lead in clearing the shipping lane.
The broader geopolitical backdrop has reduced available crude volumes. The U.S.-Israeli war on Iran, now approaching the end of its fifth week, has taken millions of barrels per day out of global supply, according to market reports. That removal of supply has helped push energy prices to multi-year highs.
Observers also note practical consequences for fuel availability. Fuel shortages have emerged in countries that depend on oil and gas shipments passing through the Strait of Hormuz, the critical chokepoint through which around 20% of the world’s oil flows.
With the front-month premium reaching record levels and backwardation widening, traders and physical market actors are focused on near-term delivery logistics and the possibility of further disruptions tied to ongoing military actions and efforts to keep shipping routes open. The market response on Thursday reflected heightened concern about immediate supply rather than longer-dated contract positions.