Brent oil is headed for its worst weekly performance since 2022, according to MarketWatch, as a U.S. delegation prepares for weekend talks with Iran as part of ceasefire negotiations. Yet beneath the headline price decline lies a far more complicated picture: physical crude from the North Sea has soared to record levels, and major producers are cautiously preparing to resume flows through one of the world's most critical chokepoints.

The whipsaw reflects genuine uncertainty about what comes next. While Brent futures have retreated below $100 per barrel following the ceasefire announcement, the physical price of Forties Blend—a key North Sea marker for immediate delivery—surged to as much as $147 per barrel on Thursday, according to OilPrice.com. That price surpassed the previous record set in 2008, underscoring how constrained supplies remain despite the diplomatic progress.

The tension between futures and physical prices tells the real story. Traders are pricing in hope that the ceasefire holds and Middle East oil flows resume. But refiners and traders dealing in actual barrels are paying premiums that reflect their skepticism about supply reliability. Chinese independent refiners, for instance, are buying Iranian crude at premiums of $1.50 to $2 per barrel above Brent, according to OilPrice.com—the first time in years they've paid such a premium for Iranian oil.

Gulf Producers Test the Waters on Hormuz Shipping

Behind the scenes, major Middle Eastern oil producers are taking tentative steps toward normalcy. Saudi Arabia, Kuwait, and Iraq are asking their Asian customers to submit cargo loading nominations for April and May shipments that would transit the Strait of Hormuz, according to OilPrice.com. The requests signal that Gulf petrostates are preparing for resumed oil flows through the chokepoint, though the cautious language—"tentative steps"—reflects lingering uncertainty about whether the ceasefire will hold.

That caution appears warranted. While an empty Russian-flagged supertanker, the Arhimeda, transited the Strait of Hormuz and moved into the Persian Gulf late Thursday with Iran's Kharg Island as its destination, according to OilPrice.com, MarketWatch reported that Israel has continued to attack Lebanon, potentially endangering the ceasefire agreement.

The Inflation Wildcard

The oil shock is creating headaches for central banks trying to control inflation. Federal Reserve official Mary Daly said in an exclusive Reuters interview that an oil shock means "getting inflation down takes longer," underscoring how energy price volatility can derail monetary policy efforts. The concern is real: U.S. consumer inflation spiked in March amid record surges in gasoline prices, according to a Reuters headline from April 10.

The geopolitical turbulence is also rattling broader markets. Australia delayed its resources outlook due to what it called "extreme volatility" stemming from the Iran war, according to Reuters, while China's factories snapped a years-long deflation spell on the Iran war price shock, Reuters reported.

Pipeline Repairs and LNG Pivots

Away from the Middle East, other supply disruptions are slowly resolving. Ukrainian President Volodymyr Zelenskyy said Ukraine will complete repairs on the Druzhba oil pipeline in spring, according to OilPrice.com. The pipeline, which carries Russian oil to Hungary and Slovakia, was damaged in what Ukraine said was a Russian drone attack in late January, halting supplies to the last two EU member states dependent on Russian crude via that route.

Meanwhile, Europe is leaning harder on Russian liquefied natural gas even as it prepares to ban Russian gas imports next year. The European Union bought 97% of the liquefied natural gas produced at Novatek's Yamal LNG facility in the first quarter of 2026, according to OilPrice.com—a 17% increase in purchases from the previous year. The surge highlights how difficult it has been for Europe to find alternative supplies at competitive prices, even as it works to reduce dependence on Russian energy.

The energy market's current state reflects a world caught between competing forces: diplomatic progress that suggests supply could stabilize, physical constraints that suggest it won't anytime soon, and structural shifts in demand that are reshaping where energy comes from and who buys it.

Reporting based on coverage from Reuters, MarketWatch, OilPrice.com, and Financial Times.