Asian refiners are now bidding extraordinary premiums for the few Middle Eastern crude barrels that can still be loaded outside the Strait of Hormuz, and that tells a great deal about how severe the physical market dislocation has become. Some refiners offered as much as $20 a barrel above ADNOC’s official price for Upper Zakum cargoes available near Fujairah, while traders said bids for May-loading barrels were at least $5 above the official selling price.

That is highly unusual because term buyers normally lift their contracted ADNOC volumes at official prices rather than paying extra. The fact that they are now willing to do so shows that buyers are no longer treating Gulf crude as a normal monthly supply stream. They are treating any accessible barrel as scarce strategic inventory.

OPEC+’s latest decision to raise June output looks meaningless if judged only by near-term physical supply. The seven remaining members still subject to voluntary cuts agreed to lift production targets by 188,000 barrels a day in June, marking a third consecutive monthly increase. But as long as the Strait of Hormuz remains largely closed, those extra barrels cannot materially ease the market because so much Gulf crude is still unable to reach buyers.

That is precisely why the move matters politically. The increase is a signal, not a solution. After the UAE’s exit from OPEC and OPEC+, the group is trying to show two things at once: that it still exists as an organized supply-management bloc without Abu Dhabi, and that it intends to preserve its role as a market balancer once the war ends and Gulf export routes reopen.

Investors are still behaving as though the Iran war is a severe but ultimately containable commodity shock, when the physical oil market is already signaling something more dangerous: a sustained disruption that financial markets have not fully priced. While the S&P 500 has continued to set record highs on the back of AI enthusiasm and robust earnings, physical crude prices have climbed to around $130 a barrel for key grades such as Forties, Cabinda, and Troll, roughly 70% above late-February levels.

By contrast, Brent futures have been trading materially lower, recently around the low-$110s, with longer-dated contracts showing a far smaller move. That divergence matters because it suggests investors are still treating the conflict as temporary, even while the market for actual deliverable barrels is reflecting a much tighter real-world supply picture.