Oil buyers racing to replace Russia’ taboo crude are paying record premiums for barrels that can be delivered now rather than later, reflecting worries about adequate near-term fuel supplies and expectations that high prices will reduce consumption and encourage drilling.

Prices for April deliveries of crude have shot up since Russia invaded Ukraine and buyers began shunning the aggressor’s oil exports. The main U.S. price last week topped $110 a barrel for the first time in more than a decade and in off-hours trading late Sunday, they burst above $130 following fresh attacks, mounting civilian casualties and a push by U.S. lawmakers to ban Russian oil imports.

Futures contracts for delivery in subsequent months have risen as well, but not by nearly as much. When U.S. futures for delivery next month ended Wednesday at $110.60 a barrel, contracts for next March settled at $84.53. The $26.07 difference has never been greater in favor of the front month. Prices ended the week a little closer together, yet the sharp rise Sunday night in near-term futures suggests a widening gap in the week ahead.

The pattern is mirrored in international markets, where the 12-month price spread on benchmark Brent crude futures also surpassed $20 a barrel last week for the first time on record and blew out even wider Sunday night when front-month futures also rose above $130.

U.S. oil futures prices by contract monthSource: FactSetNote: West Texas Intermediate, Friday settlement
April 2022’239095100105110115$120a barrel

“It’s hoarding,” said RBC Capital Markets analyst Michael Tran. He points to an 83% week-over-week jump in lease rates for very large crude carriers on the Persian Gulf to Asia route as further evidence that buyers are paying whatever they must to stock up in case Russian exports dry up. “People are saying, ‘Give me as much as you’ve got, I’ll buy as much as I can,’” he said.

Over nearly four decades of trading in West Texas Intermediate futures, a barrel on average has cost 40 cents more than one delivered a year later. The difference rarely exceeds $10 in either direction, and when it does, the blowout is usually related to a war, hurricane, market crash or pandemic. ether, yet the sharp rise Sunday night in near-term futures suggests a widening gap in the week ahead.