Trump's Blow to Iranian Oil Sparks Curious Price Divergence - Bloomberg:
The relationship between two major oil benchmarks is charting an unexpected course as U.S. sanctions take Iranian crude out of the market.
As demand for alternative Middle Eastern supply increases, regional marker Dubai crude has reason to strengthen. Yet it’s weakening against London’s Brent -- an oil grade with very different chemical characteristics that’s used to price barrels from Europe to Africa.
Brent’s gaining more because futures and derivatives linked to it are accessible to an array of financial investors and traders via a highly liquid market, compared with relatively niche over-the-counter and clearing-house platforms for Dubai. So broader concerns over a potential supply crunch are being reflected to a greater extent in the London marker.
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