Asian Refiners Mull Slashing Crude Processing As Iran War Threatens Supply

Asian refiners are contemplating significant cuts to crude oil processing due to the potential disruption of Middle Eastern oil supplies. The ongoing conflict near the Strait of Hormuz has effectively closed the vital shipping lane, halting the movement of oil tankers. This blockage threatens to delay critical crude oil deliveries contracted by Asian refiners in recent weeks. Before the conflict, Asian nations, particularly China, planned to increase Middle East crude purchases due to Saudi Arabia's price reductions. Saudi Arabia's competitive pricing made their oil attractive to Asian buyers. The Strait's closure has caused dozens of tankers to become stranded in the Persian Gulf. Major refiners in China and Japan are considering cutting crude processing rates by up to 30%. The immediate impact of the tanker halt is significant for crude oil supply, according to Kpler estimates. Asian energy security is at risk, with India and China as major buyers of Strait-transiting crude. Refiners have reserve supplies, but prolonged disruption could force rate cuts.