Asia snaps up most US oil in three years as Hormuz closure hits Middle East supplies

Asian buyers have rushed to secure US crude in the largest volumes seen in three years, as the crisis in the Strait of Hormuz has forced countries to seek alternative energy supplies to replace crude from the Persian Gulf.

Data from Kpler, an energy consultancy, and Vortexa, a ship-tracking platform, showed that Asian countries have been actively buying US crude in recent days. As a result, the volume of US crude scheduled for delivery to Asia and due to begin loading in April has surged to around 60 million barrels, the highest monthly level since April 2023.

Traders said the latest buyers of US oil included refiners in Thailand, Japan, South Korea, Taiwan and Singapore.

The closure of the Strait of Hormuz, caused by the war in the Middle East involving Iran, the United States and Israel, has dealt a severe blow to Asian countries that depend heavily on crude from the Persian Gulf.

The disruption has prompted the Chinese government to order refinery run cuts and ban fuel exports. Meanwhile, US oil producers, in the world’s largest oil-producing country, have emerged as some of the main beneficiaries of soaring demand and higher oil prices, even though more expensive crude and fuel have placed a heavy burden on consumers.

Traders said one cargo to Taiwan was priced at a premium of as much as US$12-13 a barrel over Brent crude, while other cargoes were priced at around US$18 a barrel over Dubai crude.

Shipping market activity has also risen sharply. Shipbrokers reported a significant jump in vessel bookings and related costs. The volume of US crude requiring shipment has been so large that trading houses have had to turn to smaller tankers instead of very large crude carriers, which normally carry 2 million barrels on routes to Asia.

Data from Kpler and Vortexa also showed that the United States normally exports around 110 million barrels of oil per month, with roughly half shipped to Europe and more than one-third sent to Asia.

In the first two months of this year, Asian buyers received around 35 million barrels of US crude per month.