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In October 2026, Chevron CEO Mike Wirth highlighted the difference when he said physical crude delivered into Asia was trading closer to $150 per barrel, even while Brent futures remained near $100.
The reason is simple: Brent is a benchmark. A delivered physical barrel includes additional costs determined by where the oil is located, how urgently it is needed and how difficult it is to transport.
What Does the Brent Price Actually Represent?
Brent is the world’s dominant crude benchmark and is used to price a large share of internationally traded oil.
Brent futures allow producers, refiners and investors to hedge or trade expectations for crude prices without necessarily taking delivery of an actual barrel.
Physical oil is different.
A refinery in India, South Korea or China needs a specific grade of crude delivered to a particular port at a particular time.
The final price can be thought of roughly as:
Brent benchmark + crude differential + freight + insurance + logistics costs
| Component | What It Represents | What Can Push It Higher |
|---|---|---|
| Brent benchmark | Global reference price for crude | Supply expectations, demand and geopolitics |
| Crude differential | Premium or discount for a specific oil grade | Quality, sulfur content and regional demand |
| Freight | Cost of transporting crude by tanker | Vessel shortages, longer routes and fuel costs |
| Insurance | Cost of covering cargo and vessel risks | War, attacks, sanctions and dangerous routes |
| Logistics | Ports, transfers, storage and handling | Congestion and infrastructure disruption |
| Landed oil price | Final cost paid by the refinery | Combination of all costs above |
During normal conditions, these extra costs may create only a modest difference. During severe disruptions, the gap can become enormous.
Shipping Can Push Physical Oil Far Above Brent
Suppose Brent futures trade at $105.
An Asian refinery may still have to pay a premium for a particular crude grade and then cover tanker freight, insurance and other transportation expenses.
If tanker availability falls or an important route becomes dangerous, those costs can surge.
That is what has happened around the Strait of Hormuz, where heightened security risks have pushed shipping costs sharply higher.
Those expenses are not fully reflected in the Brent price shown on a trading screen.
Not Every Barrel of Oil Is Worth the Same
Crude also varies significantly by quality.
Light, low-sulfur crude can command a different price from heavier, higher-sulfur oil because refineries can extract different amounts of gasoline, diesel and other valuable products from each barrel.
Location matters as well.
A barrel already positioned near an Asian refinery can become considerably more valuable than similar oil stuck behind a disrupted shipping route.
That is why individual crude grades normally trade at premiums or discounts to Brent.
Spot Oil and Futures Can Diverge Too
Timing introduces another difference.
Spot markets reflect crude available for immediate or near-term delivery. Futures contracts can represent oil for delivery months later.
When buyers urgently need barrels today but expect conditions to improve later, physical spot prices can trade well above futures.
This becomes particularly important when global oil inventories are already low, because refiners have less stored supply available when shipments are delayed.
So Which Oil Price Is the Real One?
Both are real, but they answer different questions.
Brent shows the market’s benchmark price and expectations for global crude supply and demand.
Physical prices answer a more immediate question: how much does it cost to get a usable barrel to a refinery right now?
Most of the time, the two remain closely connected.
During shipping disruptions, regional shortages or depleted inventories, however, freight, insurance and scarcity premiums can widen the gap dramatically.
That is how Brent can trade near $100 while physical crude delivered into Asia approaches $150.
