Oil Holds Above $100 Amid Supply Fears, Bakken Differential Narrows

Global oil benchmarks surged on Thursday, with West Texas Intermediate (WTI) crude settling above $97 and Brent crude holding firmly above $102, as ongoing Middle East tensions continued to threaten supply flows. WTI gained $1.47 to close at $97.52 per barrel, a rise of 1.53%, while Brent crude rose $1.25 to $102.46 per barrel, according to live price data. The Bakken crude differential to WTI narrowed to -$3.42.

The price strength is largely driven by persistent geopolitical risk, particularly the disruption to Middle East shipments which has forced major importers to seek costlier alternatives. According to a report from OilPrice.com, India, the world's third-largest crude importer, is feeling significant pressure. The country's average crude import price soared above $100 per barrel last week, and its import bill was 60% higher in the April-June quarter compared to the same period last year.

In response to the soaring costs and supply insecurity, Indian officials are pushing for a major expansion of biofuels. Tarun Kapoor, an adviser in India’s Prime Minister’s Office, stated at a conference that "The future of biofuels is about maximizing value from every available resource," OilPrice.com reported. India recently launched an E85 fuel blend and is promoting Flex Fuel Vehicles to reduce crude oil import dependence.

For Bakken operators, the sustained high global price environment coupled with a narrower local differential is a positive signal. A Brent price above $102 provides strong international pricing support, while a Bakken differential of -$3.42 means Bakken crude is priced at approximately $94.10 per barrel at the wellhead. This robust price level supports drilling economics and cash flow in the North Dakota shale play.

Natural gas prices, however, showed slight weakness, dipping $0.02 to $2.80 per MMBtu. This continues a trend of oil and gas price divergence, emphasizing the oil-weighted nature of the Bakken's value proposition.

The market narrative remains focused on physical supply tightness. India's experience, where reduced Middle East flows and high shipping risks in the Strait of Hormuz have led to a 41% higher import bill in July year-over-year, underscores the global supply anxiety that is underpinning current prices. As long as these disruptions persist, Bakken producers stand to benefit from elevated crude prices.