Why oil prices are no longer telling the full story
Five charts to start your day
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At first glance, this looks like a standard oil rally. Brent rises, Oman crude follows, and the market adjusts to geopolitical risk. But the real story sits above them. European jet fuel has surged far more aggressively, breaking away from crude and moving into a different regime entirely.
That divergence reflects a deeper constraint. Crude oil is only the input. What matters is the ability to refine it into usable fuels. Since the escalation in the Middle East, refining margins have widened sharply, with jet fuel prices in some regions doubling while crude has risen far less. This is not a shortage of oil in the ground. It is a shortage of usable supply.
The composition of demand also matters. Aviation fuel is less flexible than petrol or diesel, with fewer storage options and a heavier reliance on specific refining configurations. When supply chains are disrupted, those constraints become binding very quickly.
The result is a market that no longer moves in unison. Crude benchmarks still matter, but they no longer define the price consumers actually pay. The chart shows a widening gap, but the implication is broader. In this cycle, the bottleneck is not extraction. It is conversion.
Source: Bloomberg
What makes this moment uncomfortable is not just the shocks themselves, but what they reveal about the structure beneath. We tend to assume that markets are deep, flexible and able to absorb stress. In practice, they are often narrow and dependent on a handful of critical links.
I have four more charts that build on this and show where these constraints could tighten next, but they are for paid subscribers. Consider joining if you want the full edition.
