Brent's Premium to Mideast Crude Flips Negative on Trump Pressure Reshaping Oil Flows

TradingKey - According to Bloomberg's latest report, Brent crude futures—the global benchmark for oil pricing—briefly traded below the Middle Eastern benchmark Dubai crude, with the spread reaching negative 3 cents per barrel, marking the first time turning negative since April 2025.

Currently, global oil supply exhibits a significant "collective volume increase" characteristic, with both OPEC+ and non-OPEC oil-producing countries advancing production expansion plans simultaneously. The U.S. Energy Information Administration (EIA) forecasted in its latest monthly report that global oil supply surplus will reach 1.64 million barrels per day in 2025, a recent high.

Loose supply expectations continue to pressure international oil prices, with Brent crude—as the most actively traded global futures contract—being the first to react to oversupply signals. This relaxed expectation has not only depressed Brent futures' forward prices but also weakened the calendar spread, a "barometer" of market health—when this indicator weakens, it typically reflects short-term supply abundance and bearish market sentiment.

In stark contrast to Brent crude's weakness, Middle Eastern oil prices have strengthened against the trend, supported by Asian demand, with Dubai crude—the core benchmark price in the Middle East—showing particularly strong performance.

U.S. President Trump has been continuously pressuring the Indian government to reduce imports of Russian crude, forcing Indian refiners to accelerate their shift toward Middle Eastern markets for alternative resources in the short term.

Indian Oil Corporation, Bharat Petroleum, and other state-owned refiners have entered the spot market intensively, purchasing crude from Middle Eastern producers such as UAE and Saudi Arabia, as well as alternative sources like the United States and Nigeria, to meet short-term refinery demand. As the world's third-largest crude oil importer, India's procurement shift has directly boosted spot demand for Dubai crude.

Although Indian refiners are filling supply gaps through the spot market in the short term, long-term procurement strategies remain uncertain. Asian traders analyze that India's refining industry may further align with core Middle Eastern producers such as Saudi Arabia and Iraq.

This inversion of the Brent-Dubai crude spread may herald profound changes in the fundamental dynamics of the global oil market.