Brent, the global crude oil benchmark, is trading at a rare discount to its Middle Eastern counterpart, as President Donald Trump cracks down on Russian barrels and a glut is forecast for later in the year.
Brent futures were trading at a discount of 3 cents a barrel to Dubai, the first time the differential has turned negative since April, according to data compiled by Bloomberg. Most crudes produced in the Persian Gulf — the main source of Asia's supply — are priced relative to Dubai.
Traders expect the market to be awash with crude in the coming months, as both the OPEC+ alliance and non-members increase production, which has pressured Brent futures and also weakened timespreads — a barometer of market health. Meanwhile, demand for Middle Eastern grades has been buoyed by a brief flurry of buying from Indian refiners as Trump threatens the nation for buying Russian barrels.
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