Asian oil buyers are once again looking to the United States to secure crude supplies as escalating conflict in the Strait of Hormuz severely disrupts Middle Eastern oil flows. Buyers in Japan were at the forefront of purchasing May-loading cargoes from the US, with South Korean, Singaporean, and Thai processors also increasing their orders. This surge in demand has led to at least 60 million barrels of crude from the US Gulf being bought for May loading, matching April's figures and marking a three-year high.
This shift highlights growing reliance on US crude by Asian refiners who are desperately seeking alternatives to stave off potential shortages that could impact their broader economies. The increased purchases come as the Strait of Hormuz, a critical shipping lane for a significant portion of the world's oil and gas, faces heightened risks and interruptions due to renewed hostilities, including attacks on tankers and military actions.
The proposed 20% fee on cargo passing through the Strait of Hormuz by President Donald Trump's administration, estimated to add about $16 per barrel to oil shipped through the strait, further complicates Middle Eastern supply reliability. This financial burden, coupled with the risk of military escalation and potential complete closure of the strait, is making US crude a more attractive and stable option for Asian markets, despite earlier expectations of a global oil surplus returning by late 2026.
