According to traders, refineries in Asia purchased at least eight million barrels of US oil in mid-July. Buyers are located in South Korea, Japan, and Thailand. Meanwhile, renewed hostilities between the US and Iran are slowing traffic through the Strait of Hormuz. Recently, only three cargo ships passed through the strait; large crude oil tankers and LNG vessels were once again absent. Consequently, buyers are accepting higher prices for supplies from outside the Persian Gulf.
US oil is replacing supplies from the Persian Gulf that are at risk of disruption
Two South Korean refineries purchased at least five million barrels of the US West Texas Intermediate grade. Japan’s Eneos also secured two million barrels, while Thailand’s PTT took around one million barrels. Premiums for the South Korean shipments ranged from eleven to twelve dollars above the Dubai benchmark. Although American crude remains more expensive, reliable availability is the primary factor.
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The fresh buying impulse follows another slump in traffic through the Strait of Hormuz. Just a few days ago, only three crude oil tankers passed through the strategic strait. Furthermore, for the second consecutive day, no visible supertankers carrying crude oil or liquefied natural gas made the transit; several vessels halted before the entrance or altered their course. Iranian attacks and renewed US blockades targeting Iranian ships are consequently heightening uncertainty for shipowners.
Asia’s energy supply is heavily dependent on the Strait of Hormuz
The impact is particularly severe for Asia, given that approximately 20 percent of global oil shipments previously passed through the strait. China, India, Japan, and South Korea source large quantities from the Gulf states. However, strategic reserves can only bridge supply shortfalls temporarily. The International Energy Agency is therefore warning of risks to the global energy supply—particularly if the passage does not reopen permanently within a few weeks.
Refineries are also seeking cargoes from West Africa, Latin America, and Russia. Yet, longer shipping routes drive up freight rates and tie up crude oil tankers for extended periods. While US oil offers a vital alternative, it cannot fully replace the missing volumes from the Gulf; capacity constraints at ports, pipelines, and export terminals limit the volume available in the short term. Consequently, the market remains dependent on a return to regular traffic through the Strait of Hormuz.
Additional demand intensifies competition with Europe
At the same time, American refineries are already benefiting from high international demand for fuels. Their profit margins recently hit record highs, while US inventories of diesel and gasoline remained low. Consequently, increased Asian purchasing of US oil could intensify competition with Europe. Traders tend to prioritize markets offering higher prices, raising the risk of price premiums for crude oil, diesel, and jet fuel.
As long as the attacks continue, oil prices and transport costs remain vulnerable to sudden spikes. Brent crude recently traded at around $84 per barrel, while WTI stood at approximately $79; both benchmarks gained nearly 12 percent in a single week. Conversely, a lasting reopening of the Strait of Hormuz could bring delayed Gulf shipments back onto the market. Without this relief, Asia is likely to continue its search for alternative suppliers.
Author: Blackout News
Sources: Focus (16.07.26) – Hellenic Shipping News (16.07.26) – rigzone (15.07.26) – The Guardian (13.07.26) – IEA (10.07.26)