4th October 2026
If you have been listening to the latest oil-price reports, you could be forgiven for thinking that crude oil is hovering around $100 a barrel.
And that is broadly correct – if you are talking about the Brent futures price.
But there is another oil price which is attracting much less attention.
Dated Brent has moved above $120 a barrel.
That is not a trivial difference. At the beginning of October, ICE Brent was around $101–102 a barrel while Dated Brent was around $120–121. The gap was therefore roughly $20 a barrel. Reuters reports that the Brent futures price subsequently settled at $102.25 on October 2.
So what exactly is going on?
Two oil prices telling two different stories
Dated Brent is a benchmark for physical crude oil – oil that is actually available for delivery. S&P Global describes it as a benchmark for physical North Sea crude and says it is widely used as a reference for transactions involving crude oil and refined products.
The Brent futures price, by contrast, is heavily influenced by what traders think oil will be worth in the future.
Normally the two prices move fairly closely together.
Right now they don't.
And that matters.
The simplest way of looking at it is that the futures market is looking ahead and expecting conditions to improve, while the physical market is telling us that obtaining actual barrels of oil remains expensive.
That does not necessarily mean that Brent futures are "wrong". If oil supplies recover and the disruption eases, the physical price could fall back towards the futures price.
But there is another possibility.
The futures price could eventually have to move upwards towards the physical market.
Why is physical oil so expensive?
The background is the continuing disruption to oil supplies and refined fuel markets caused by the conflict involving Iran and the continuing problems around the Strait of Hormuz.
There have been signs of improvement. More oil has been moving through Hormuz, and Middle Eastern exports have recovered to some extent.
But that has not restored the market to normal.
The Wall Street Journal reported that Dated Brent remained around $121 even as Brent futures were around $100. HSBC analysts described physical markets as still tight despite the improvement in flows.
There is also a particularly important problem with refined fuels.
Europe is short of diesel.
The G7 has now agreed to coordinate the release of 100 million barrels of crude oil and diesel from emergency stocks, following pressure to bring fuel prices down. Reuters reported that the package includes a proposed 50 million barrels of European diesel and a further 50 million barrels of crude from IEA members.
That tells us something.
Governments do not normally start opening emergency fuel reserves because everything is comfortably under control.
Britain is already seeing the effect
British motorists don't have to wait for Brent to reach $120 to discover what expensive oil means.
On October 2, the average UK diesel price reached £2 a litre for the first time, according to the RAC as reported by Reuters.
The latest UK fuel-price data puts the average at about 200.3p a litre for diesel and 175.0p for petrol. Diesel has risen by around 14.6p a litre over the past month in that dataset.
And diesel is particularly important because it doesn't just affect motorists.
It powers lorries, tractors, vans, construction equipment and much of the machinery involved in moving goods around the country.
So an expensive diesel market can eventually work its way into the price of food, building materials, deliveries and many other everyday goods.
And then there is heating oil
For rural Scotland, there is another reason to watch what happens.
Heating oil is not priced directly from the Brent futures market. It is influenced by the cost of crude, refining, transport, regional supply and demand and the value of the pound.
That means a persistent shortage of physical oil and refined products can eventually feed through into heating-oil prices.
For households already facing higher heating costs, that is the part of this story worth watching.
The question is therefore not simply:
"Will Brent go above $120?"
It is:
"How long can physical oil remain around $120 while the futures market stays around $100?"
There are two very different possible outcomes
The first would be good news.
Oil flows through the Middle East could continue to recover. The conflict could ease. Refinery production could increase and emergency stock releases could provide additional supplies.
If that happens, the extraordinary gap between physical oil and futures could close because Dated Brent falls.
The second outcome is rather different.
If physical supplies remain tight, inventories continue falling and refiners continue competing for available crude and diesel, the futures market could begin moving towards the physical market.
That would mean higher oil prices rather than lower physical prices.
And that is why the $20 gap deserves attention.
Don't panic – but don't ignore it either
There is no guarantee that oil is heading to $120 on the conventional Brent benchmark.
Indeed, the emergency stock releases could help to push prices lower if additional supplies arrive at the right time. Reuters reported that some analysts believe the releases, combined with improving Middle Eastern flows, could be enough to move the overall market back towards a small surplus.
But the physical market is sending a message that is difficult to ignore.
Actual barrels of oil are currently worth considerably more than the headline futures price suggests.
For consumers, that may ultimately matter more than the number appearing on the financial news ticker.
Because we don't fill our cars, lorries or oil tanks with a futures contract.
We need the real thing.
And right now, the real thing is expensive.
That is why the apparently reassuring headline – "oil is only around $100" – deserves a little more investigation.