As hostilities between the U.S. and Iran escalate, observable vessel traffic through the Strait of Hormuz has nearly ground to a halt, prompting Asian refiners to attempt to procure more American crude.
At least three industry insiders involved in U.S. crude sales and Asian refinery procurement have indicated they have resumed negotiations for U.S. spot crude cargoes. These individuals requested anonymity as they were not authorized to speak publicly on the matter.
This resurgence in purchasing interest follows a period where discussions had quieted down due to a large influx of backlogged Middle Eastern supplies into the spot market. However, with a ceasefire agreement on the verge of collapse, those Middle Eastern supplies are now at risk.
Recent days have seen an increase in attacks targeting vessels. Concurrently, Washington has re-imposed a blockade on Iranian ports, and U.S. President Trump has demanded a 20% compensation fee on all other goods transported via the strategic waterway. For a fully loaded supertanker carrying crude, this fee amounts to approximately $30 million.
The deteriorating situation has disrupted shipping and oil markets. Just recently, markets were actively readjusting expectations to accommodate a new landscape following the anticipated restoration of energy flows from the Persian Gulf. However, as of Tuesday, observable vessel traffic through the Strait of Hormuz had almost completely ceased. Nonetheless, some Iranian tankers are reportedly transiting the strait covertly by turning off their transponders.
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