The escalating standoff between the US and Iran has led to a near-halt in shipping traffic through the Strait of Hormuz, prompting a surge in American crude purchases across Asia.
Traders indicate that at least 11 million barrels of US crude were sold to Asia on Tuesday night, with potential for further deals. Industry sources, who requested anonymity as they are not authorized to speak publicly, revealed that buyers include several refineries in South Korea, Japan, and Thailand, with some shipments potentially loading as soon as this month.
This renewed buying frenzy comes after a previous lull in Asian purchases of US crude, which coincided with a large influx of backlogged Middle Eastern oil into the spot market. The current surge is driven by the near-total collapse of ceasefire prospects between the US and Iran, raising the risk of disruptions to key Middle Eastern oil transport routes.
At least three executives responsible for marketing US crude to Asian refiners confirmed they have resumed negotiations for US crude spot cargoes, coinciding with this wave of demand. These executives also spoke on condition of anonymity due to lack of public speaking authorization.
As Asia rushes to secure US crude, prices for Middle Eastern oil have also risen, consequently narrowing the price differential between the two regional benchmarks.
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