By Antonio Di Giacomo, Senior Market Analyst at XS.com
The crude oil market has once again turned its attention to the spread between WTI and Brent, which has widened significantly in recent sessions due to a notable shift in physical crude flows into the United States. Expectations of a large influx of Venezuelan barrels into the U.S. system are now reflected in relative pricing, putting pressure on WTI and reshaping regional supply balances.
The spread between the two benchmarks recently climbed above $4.70 per barrel, its highest level since April, a threshold that has historically opened international arbitrage windows. When WTI trades at such a discount to Brent, U.S. cargoes become more competitive for Europe and Asia, even after accounting for freight costs and quality differentials.
One of the key drivers behind this move is the expectation that up to 50 million barrels of Venezuelan crude could gradually enter the U.S. market following the Coast but also pushes part of domestic production toward export markets, intensifying the relative downward pressure on WTI.
Market estimates suggest that this new balance could translate into an additional 100,000 barrels per day in U.S. crude exports during the first quarter of 2026. This reinforces the structural nature of the move: it is not merely a speculative reaction, but a real adjustment in physical energy flows.
Meanwhile, Brent is finding support in a more tense geopolitical backdrop. Frictions surrounding Iran and potential supply disruptions have added a risk premium that some market participants estimate at $3-$4 per barrel. This dynamic has kept Brent relatively firm, even during sessions when global risk appetite weakens.
In price terms, this divergence has been clearly reflected: Brent has held above $65 per barrel. At the same time, WTI has tended to consolidate near $60–61, reinforcing the narrative of relative abundance in the U.S. market versus an international benchmark more sensitive to geopolitical risks. This environment also carries significant implications for refiners, traders, and risk managers. A wider spread alters crude purchasing decisions, influences refining margins, and reshapes global trade flows. In addition, the WTI–Brent spread once again serves as a key barometer of the balance between regional supply and international tensions.
In conclusion, the widening gap between WTI and Brent is not an isolated phenomenon but rather the result of structural and cyclical forces acting simultaneously: greater adequate supply in the United States from incoming Venezuelan crude and a geopolitical premium that continues to support Brent. As long as these conditions persist, the spread is likely to remain elevated, supporting
U.S. exports and, at least temporarily, redefining the dynamics of the global oil market.