Asian refiners turn to Argentine crude as Iran war chokes supply

Asian crude oil importers have turned to Argentina — a supplier that had no oil exports to the region until 2024 — as the ongoing Iran war continues to choke off Middle Eastern supply through the Strait of Hormuz, reshaping global energy trade flows on multiple fronts.

Argentine Crude Finds New Buyers in Asia

Refiners in Japan, South Korea, and China purchased cargoes of Argentina's Medanito crude in recent weeks, with at least one shipment loaded earlier in August, according to Bloomberg, citing traders familiar with the matter. The grade, produced at the Vaca Muerta shale basin, is comparable in quality to U.S. West Texas Intermediate and is being sold at a discount of $1–$2 per barrel versus WTI, traders told Bloomberg.bloomberg+1

A key factor driving demand is the route itself. Medanito crude travels from Argentina around South America and into the Pacific without passing through any chokepoint or canal, avoiding both the Panama Canal and the Suez Canal. Argentina's oil sales to Asia have jumped this year compared with 2025, according to Argentine government data compiled by Bloomberg.oilprice+2

The U.S. Energy Information Administration forecast in June that Argentina's crude production would average 810,000 barrels per day in 2026, with continued growth from Vaca Muerta helping offset global supply constraints.eia

Asia Fills Africa's Diesel Gap

The supply disruption is also rewriting diesel trade. Asian refiners are expected to have sent up to 15 million barrels of diesel to Africa in August, the highest volume in at least four and a half years, according to a Reuters analysis of ship-tracking data cited by OilPrice.com. Middle East diesel exports to Africa, meanwhile, have crumbled to the lowest level in nearly nine years.oilprice

The Jazan refinery operated by Saudi Aramco on the Red Sea coast shipped no diesel to Africa in August, compared with 163,000 tons in July, according to data from Kpler cited by Reuters. Houthi attacks on Saudi energy infrastructure, combined with ongoing threats to tankers in both the Strait of Hormuz and the Bab el-Mandeb Strait, have crippled the flow of fuel from the region.oilprice

A Disruption Without Precedent

The Strait of Hormuz, which carried roughly one-fifth of global oil supplies before the war began in late February, has seen shipping effectively collapse. Between eight and 15 vessels crossed the strait in early August, according to ship-tracking platform MarineTraffic — a fraction of the roughly 130 daily transits before the conflict, as reported by Al Jazeera. Iran has insisted the waterway will not reopen without concessions from Washington, including sanctions relief and war reparations.aljazeera

The EIA noted that disruptions in the second quarter drove U.S. distillate and jet fuel exports to record highs as buyers worldwide scrambled for alternative supply. China is also easing its fuel export restrictions, and other Asian refiners are increasing run rates to meet demand.eia+1