Asian refiners rush to buy US crude as Hormuz blockade resumes

Asian oil buyers are returning to negotiate spot cargoes of U.S. crude oil after a brief window of recovery in Strait of Hormuz flows collapsed this week amid a sharp re-escalation between Washington and Tehran. The pivot marks a resumption of the supply chain workaround that sustained Asian refiners during the most acute phase of the crisis earlier this year.

Blockade Reinstated as Strikes Continue

The renewed scramble for American barrels follows President Donald Trump's decision on Monday to reinstate a naval blockade targeting Iranian shipping through the Strait of Hormuz, effective Tuesday at 4 p.m. ET. Trump declared the U.S. would serve as "guardian of the strait" and demanded a 20% fee on all cargo transiting the waterway.cnbc+1

The move came after a weekend of intensifying military action. The U.S. launched a third consecutive round of strikes against Iran following attacks by the Islamic Revolutionary Guard Corps on commercial vessels and UAE-linked tankers in the southern shipping route. The United Arab Emirates reported two tankers were hit along that corridor, raising fresh concerns about the safety of alternative passages around Iranian waters.youtube+1

Brent crude surged past $85 per barrel on Tuesday, reaching its highest level in four weeks, while WTI crude rose above $79. The rally unwound weeks of price declines that had followed a June 18 U.S.-Iran memorandum of understanding, which briefly appeared to end hostilities.dawn+3

Asian Refiners Resume US Spot Purchases

According to Bay Street, Asian buyers began negotiating spot cargoes of U.S. crude after the expected recovery of Hormuz flows stalled with this week's re-escalation. The trade echoes April, when Asian refiners—led by Japan, South Korea, and Singapore—purchased massive volumes of WTI Midland crude at premiums of $30 to $40 per barrel above benchmarks.japantimes+2

The Strait of Hormuz has been effectively contested since early March, when U.S. and Israeli strikes on Iran prompted Tehran to obstruct the waterway that normally carries roughly a quarter of global seaborne oil. Although the June deal brought temporary relief, the International Energy Agency noted in its July report that the forecast for market normalization "hinges on the assumption that tanker flows through the Strait will gradually recover"—an assumption now in doubt.csis+1

China's Demand May Shape the Next Move

China's crude imports plunged to 7.8 million barrels per day in May, their lowest since 2017, as the war crimped supply and Beijing held off scrambling for replacements. Fresh reports on July 14 indicated imports had dropped to nearly a decade low. Analysts are now watching whether China's refinery utilization and import recovery—rather than the blockade itself—will determine the next leg of the oil price rally. The U.S. Energy Information Administration forecasts global oil consumption will fall by 1.2 million barrels per day in 2026, with a rebound expected only in 2027 once prices drop and supply normalizes.youtube+3