Brent-WTI Spread Hits $12.68 as Diesel Export Ban Fears Split Crude Markets

For traders, portfolio managers, and commodities analysts, this is not a simple price dip but a critical dislocation in the oil market. Brent and WTI are normally correlated, but the $12.68 spread—the widest since May—reveals how US policy risk and regional war exposure are repricing different barrels, creating clear relative-value trade setups and complicating risk management.

On Friday, September 25, 2026, crude oil prices eased as markets weighed the possibility of a truce between the United States and Iran against fresh Houthi attacks on Saudi Arabia following a week of violent price swings. Brent crude fell 87 cents, or 0.82%, to $105.73 a barrel at 0212 GMT, while West Texas Intermediate fell $1.56, or 1.65%, to $93.05 a barrel. The sluggish opening contrasted sharply with Thursday, when both contracts rose as much as 5%; Brent settled up 3.4% to its highest close since September 15, and WTI gained 2.7%. The market is effectively trying to price two competing tail risks at once: a diplomatic off-ramp and continued physical supply disruption.

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Brent crude fell 87 cents, or 0.82%, to $105.73 a barrel at 0212 GMT, while West Texas Intermediate fell $1.56, or 1.65%, to $93.05 a barrel.

The geopolitical backdrop is the dominant force. Since the war between the US and Iran began at the end of February, roughly a fifth of the world's oil and gas shipments have been curtailed, helping to drive prices up by as much as 50% in March alone. Liquefied natural gas buyers have been forced to look further afield for stable supplies as the super-chilled fuel trade also feels the strain. US and Iranian negotiators in New York are now exploring a phased path out of the war that would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran, according to sources close to the talks. On Thursday, Iranian President Masoud Pezeshkian underscored the uncertainty, saying it is up to the United States to choose when the war will end: "It's America that must choose whether it wants to end this or not."

Beneath the headline price action, a critical dislocation has emerged between the two benchmark crudes. The spread between Brent and WTI stood at $12.68, the widest it has been since May, when it exceeded $13. This divergence is unusual because the two contracts typically move in tandem, with the US contract usually selling at a discount. WTI's underperformance is stark: it was down 13% over the prior six sessions and is down 6.42% for the week, while Brent has risen 2.09% over the same weekly window. The chief driver is the fear that a US ban on diesel exports could flood the domestic market with refined product, pressuring US crude and product prices. Tim Waterer, chief analyst at KCM Trade, noted that the unusually wide WTI-Brent spread "also reflects the different regional risk profiles at play." Brent is more exposed to the Middle East war risk premium, while WTI is more exposed to US policy decisions and domestic supply-demand balances.