WTI-Brent Spread Hits Widest of 2026 as US Diesel Export Ban Talk Meets Hormuz Diplomacy
West Texas Intermediate is trading about $12 a barrel below Brent, the widest discount of the year, as Washington weighs a temporary diesel export ban that analysts warn would force US refiners to cut crude runs by roughly 2 million barrels a day. European gas slid more than 8% on the week on renewed US-Iran diplomacy, but EU storage still trails last year by 12 percentage points.
Brent crude settled at $104.32 a barrel on Friday 25 September, down $2.28 or 2.1% on the session, while WTI fell $2.20 or 2.3% to $92.41, leaving WTI down roughly 7.9% on the week against a Brent close that was little changed. The divergence has widened the Brent-WTI discount to about $12 a barrel, a level last seen in May and the widest of 2026. Traders attribute the gap less to differentials in crude quality than to policy risk: a proposed US ban on diesel exports would strand barrels that refiners currently sell into Europe and Latin America.
Wood Mackenzie estimates that a 90-day diesel export ban would redirect some 700,000 barrels a day of diesel and gasoil into domestic storage, filling available tankage in a little over a month and forcing refiners to cut run rates by about 2 million barrels a day. US refiners produce roughly 5.1 million barrels a day of diesel, export about 1.2 million barrels a day and consume close to 3.6 million barrels a day domestically, according to JP Morgan data cited by OilPrice. Energy Secretary Chris Wright has publicly argued the measure would backfire, warning that refiners unable to export diesel would run out of storage and have to reduce US refining, pushing gasoline and jet fuel costs higher.
Freight economics are reinforcing the dislocation. A very large crude carrier voyage from the US Gulf Coast to Asia now costs around $50 million, according to Signal Maritime data cited by Reuters, against roughly $16 million before the February outbreak of the US-Israeli war with Iran. At the same time Kpler estimates Middle East crude exports are running just under 80% of pre-conflict levels, with about 33.7 million barrels moving through the Strait of Hormuz in the week beginning 20 September, broadly in line with the prior week but far from a normalised transit flow.
European gas did not follow crude lower. Dutch TTF and UK NBP front-month contracts each shed about 3.2% on Friday 25 September, capping a weekly decline of more than 8% and returning to roughly EUR 74.98 per megawatt-hour as US-Iran talks reduced the perceived risk of a lasting LNG disruption. The inventory arithmetic has not improved: Gas Infrastructure Europe puts EU storage near 70% of capacity, about 12 percentage points below a year earlier and further below the five-year seasonal norm, while Asia's JKM benchmark at $26.38 per MMBtu keeps spot cargoes competitive against European buyers.