The Midland-to-Houston crude oil differential has undergone a dramatic round trip over the past several months. As the charts below show, the spread surged to its highest levels in years during the early months of the Iran war before collapsing back toward historical norms. After averaging less than $0.35/bbl through most of 2023-2025 (left graph), the differential briefly exceeded $3/bbl on a daily basis in April 2026 (right graph) and pushed the monthly average to levels not seen since major Permian pipeline capacity constraints were a recurring concern back in 2018-19.
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