Brent crude fell to about $97.50 a barrel on Monday, extending last week's 16% slide, after President Trump said new strikes on Iran were "highly unlikely" to be needed if Tehran signs a "very strong agreement." At the same time, Abu Dhabi's Murban crude, a physical Gulf grade, rose $3.28, or 3.4%, to $99.17.
Two oil prices moving in opposite directions on the same morning is unusual. It tells you that traders betting on the future and refiners buying barrels today see different worlds.
Futures trade the talks, physical barrels trade the strait
Futures are where investors bet on where oil will be in the coming months. Right now those bets follow the diplomacy: Trump's comments to CNN pushed Brent down more than $1 at one point on Monday. The midterm results, which Trump acknowledged were hurt by the war, added to expectations of a deal. Brent had already settled at $98.32 on Friday, after its steepest weekly fall since 2020.
Physical crude is what refiners need now, and it depends on whether ships can move. They mostly can't. IMF PortWatch recorded a single vessel passing through the Strait of Hormuz on 1 November, against a normal 85 a day. A tanker was reported burning after a strike in the strait on 8 November. With Gulf supply that tight, buyers are paying about $1.70 above Brent for Murban.
What it means for fuel prices
For drivers, the futures price matters most in the short run, because it feeds into gasoline. That's why US gasoline futures fell almost 13% last week. But refiners that rely on Gulf grades, especially in Asia, are still paying close to $100 a barrel. If the gap lasts, it could keep fuel costs in Asia higher than the headline oil price suggests.
The risk: the futures market is ahead of the facts
Nothing is signed. Trump tied his comments to a deal that doesn't exist yet. Iran has warned that any new attacks would bring retaliation.
Ships are still being hit. Both the US and Iran reported vessels struck in or near Hormuz, even as prices fell.
Attacks are reaching Saudi Arabia too. On Sunday, falling debris from an attempted attack caused limited damage to an Aramco office building in Riyadh, with no injuries, a Saudi energy ministry official told Reuters. The Saudi-led coalition said it destroyed three ballistic missiles fired by Yemen's Houthis at the kingdom.
Physical prices can be thin. Murban quotes come from fewer trades and can swing hard, so one day's jump isn't a trend.
What would close the gap
If ships start moving through Hormuz again, Murban's premium should fade and confirm the futures market's view. If transits stay near zero, futures may have to climb back toward physical prices. Brent closing back above $100 would be the first sign of that.
Futures are pricing the peace. The barrels are still pricing the war. One of them will have to move.
Sources: Gulf News (9 Nov), citing Oilprice.com and IMF PortWatch; Al Jazeera and Banker (8 Nov), citing Reuters; Nation Thailand (9 Nov), citing CNN; CNBC via FinanceFeeds (7 Nov); Topstep (8 Nov).