Logistical Friction Floor

While the Strait is open, shipping traffic requires a coordinated route. This logistical friction acts as a price floor, preventing Brent from following the bearish trend usually seen in a well-supplied market.

Brent WTI Spread

The spread averaged $12/b recently as Brent was more exposed to higher shipping costs. As maritime security improves, this spread is expected to narrow but remain volatile through the quarter.