Bakken Crude Commands $7 Premium as Iran War Roils Markets

North Dakota crude oil shipped on the Dakota Access Pipeline (DAPL) is fetching nearly $7 more per barrel than a key U.S. benchmark price, according to state officials briefing on April 21. The premium, attributed to global market volatility from the Iran war, represents a potential uplift for royalty owners, producers, and state tax revenues.

Justin Kringstad, director of the North Dakota Pipeline Authority, and Nathan Anderson, director of the Department of Mineral Resources, presented the monthly "Director's Cut" update. They noted Bakken crude at its Illinois destination is trading well above traditional benchmarks, a reversal of the typical discount for transportation costs. One theory is the region's light, sweet crude is in higher demand for refining into jet fuel and diesel in markets like Europe.

"How much of that higher price benefits North Dakota will be more clear in the coming months," Kringstad said, according to the North Dakota Monitor. "Royalty owners, the producers, the state, all share that uplift." Anderson added he suspects only a portion of the premium makes its way back to the state.

The officials described a market dominated by volatility since the Iran war began on February 28 and the subsequent closure of the Strait of Hormuz. "Over the last seven days, I think we’ve had almost a $20 swing in price," Anderson said. Official state production and price data, which lags by two months, does not yet fully reflect this turmoil.

February production was 31.6 million barrels, or 1.129 million barrels per day, slightly below the state's budget forecast of 1.15 million bpd. The budget's price assumption of $59 per barrel also exceeded February's actual price of $57.54. Anderson noted the next monthly data will show a "substantial" price increase.

Despite high prices, a significant drilling ramp-up is not expected soon. Anderson said publicly-traded companies have set 2026 budgets and are unlikely to add rigs until 2027. The active drilling rig count stands at 26, with companies indicating plans to add only "one or two more."

However, operators are optimizing existing wells. The number of maintenance rigs has increased from 110 to 125 since last month, and the total number of producing wells rose by 171 from January to February. Privately-owned companies, with more budget flexibility, could potentially invest in more drilling if prices remain high.

The full impact of the Iran conflict on North Dakota's production and state budget remains uncertain. Anderson emphasized the current environment is defined by market chaos and caution among major operators.