The discount on US crude futures to the global benchmark Brent has grown by around $1 per barrel since the US ousted Venezuelan President Nicolas Maduro on January 3 and took control of the South American country's oil flows.
Traders and analysts said the US is redirecting millions of those barrels to US ports in a move likely to boost US crude exports in the coming months. US crude futures were trading at a $4.76 a barrel discount to Brent futures on Tuesday, their largest since April, according to LSEG data.
Investors said the prospect of more US-bound Venezuelan barrels was widening that spread and creating an open arbitrage window for traders, as shipping economics to Europe and Asia strengthen.
Up to 50 million barrels of Venezuelan crude are set to enter the US market after US forces captured Maduro and Washington struck an agreement with the interim government in Caracas.
The WTI-Brent spread widened by 21 per cent last week, the largest weekly change since June 2025. Traders typically seek a $4 discount for US crude futures versus Brent to reap a profit for their exports that factors in costs such as shipping US crude across the Atlantic.
The US exported an average of 3.7 million barrels per day of crude in December, according to ship tracking firm Kpler. Higher flows from Venezuela could lift US exports by a further 100,000 bpd in the first three months of this year, Matt Smith, lead oil analyst at Kpler, said.
US exports hit a record high of 4.47 million bpd in March 2023, according to Kpler, and the WTI discount was around $6.50 when those deals were made.
The spread between WTI and Brent has widened for seven straight trading sessions since January 5. Escalating tensions in Iran are boosting Brent faster than WTI, with Venezuelan cargoes set to start loading this week for the US.
This is curbing US crude futures' gains on expectations of ample supplies. "A heavier US crude diet would push more domestic WTI barrels into export markets," said Dylan White, director of North American crude markets at consultancy Wood Mackenzie.
"Relative WTI prices are expected to discount more steeply as additional exports clear into an oversupplied global market." The WTI-Brent spread will ultimately depend on how much Venezuelan crude enters the US and replaces US oil that would otherwise be refined locally, a freight trader said.
If a bigger US surplus is created, those barrels will likely move to Europe or further east, the trader said. North Sea Forties crude, part of the dated Brent basket, was priced at a $1.30 a barrel premium to WTI Aframax cargoes in Europe for early March, analysts at Sparta Commodities said.
They added that such a spread is rarely sustained for long. Brent crude oil's premium to Middle East benchmark Dubai rose on Tuesday to its highest since July, LSEG data showed.
"If China steps back in to buy and Iranian crude is unavailable due to either a blockade or the new sanctions, then any substitute buying in Middle Eastern grades will be more felt in Brent rather than WTI," said John Evans, analyst at PVM Oil Associates.
(Reporting by Georgina McCartney in Houston, Seher Dareen in London; Editing by Liz Hampton, Rod Nickel)
