U.S. physical crude grades have slipped as the wartime risk premium fades. A U.S.-Iran accord reopening the Strait of Hormuz has lifted expectations for Persian Gulf barrels to return, easing the pressure that once pushed Magellan East Houston to an $8‑a‑barrel premium over WTI this week and signaling a shift in supply dynamics. Market watchers.

Offshore benchmarks mirror the trend. Mars crude slid to a $1‑a‑barrel premium over WTI, down from $18 in April, while Thunder Horse heavy sour has also weakened. Dubai crude’s physical premium turned negative after peaking at $65 a barrel in March, underscoring how quickly Gulf supplies have normalized for global buyers and traders today.

Futures markets echo the softening. Brent’s prompt spread narrowed to roughly 25 cents a barrel, down from over $12 in April, a key gauge of near‑term supply tightness. The contraction signals that concerns about immediate shortages are easing, tightening arbitrage windows into Europe and Asia for traders in the midstream sector and port operators today.

With Persian Gulf supplies returning, U.S. exporters face a cooling demand that could dent revenue for Gulf Coast producers and shippers. The narrowing premium limits profit margins on spot sales, while the easing arbitrage window pressures traders to lock in deals sooner. Investors will watch how quickly the market readjusts to the new supply balance.