Asian Oil Refiners Scoop Up US Crude as Iran War Intensifies
(Bloomberg) -- The escalation of hostilities between Washington and Tehran and a virtual standstill in observable traffic through the Strait of Hormuz has prompted a flurry of Asian purchases of US oil.
At least 11 million barrels of US crude were sold to Asia late on Tuesday, and more deals may follow, according to traders. The buyers included refiners in South Korea, Japan and Thailand and some of the oil may load as soon as this month, they said, asking not to be named as they’re not authorized to speak to the media.
The upsurge in interest follows a hiatus when the trade went quiet due to waves of backlogged supplies from the Middle East hitting the spot market. Those flows are now under threat as the ceasefire between the US and Iran looks all but over.
The purchases came after at least three executives involved in selling US crude and procuring for Asian processors told Bloomberg they have once again started to negotiate for spot sales of American cargoes, asking not to be named as they’re not authorized to speak publicly.
The sudden spurt in US oil buying also coincided with a rally in Middle Eastern crude prices, which narrowed the price differential between the two regions.
Attacks on ships have increased in recent days, while Washington reimposed a blockade of Iranian ports. The deteriorating situation has upended shipping and oil markets, which had, until recently, been busy recalibrating as they adjusted to a recovery in energy flows from the Gulf. As of Wednesday, there was only a trickle of observable traffic going through Hormuz, although Iran has been sneaking crude tankers out of the gulf with their transponders turned off.
(Updates throughout with overnight deals.)
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