Asian oil markets and the Middle East war with Ye Lin and Prya Walia

Let’s Talk Energy and look at how oil-importing countries in Asia are coping with the loss of vital Middle East supply as benchmark prices hit four-year highs above $120. Following the start of the war in the Middle East, many refiners in Asia, who are the largest buyers of barrels transiting the Strait of Hormuz, have spent the two months scrambling to find alternative supplies and bidding up spot cargoes of certain grades. But, at least in one country, that is changing. Recently, China’s refiners have flipped their approach and are selling cargoes back into the market, as export curbs, price controls and price-sensitive consumers hurt the economics of turning the crude into fuel. The change comes at a time when so-called alternative supplies, including those from Russia and Iranian cargoes that had continued to transit until the most recent US blockade of Hormuz, come under increasing pressure. But first, we look at the dynamics surrounding the departure of the UAE from Opec+ and how it could impact the markets in the near-term and further into the future.

• How are major Asian importers finding the barrels they need at a price they can afford, while also shielding consumers from higher fuel costs?

• How has China’s strategic shift impacted both physical and futures markets and how might we expect that behavior to evolve?

• And will sanctions on one of China’s largest teapot refineries create a bidding war with Indian refiners over a limited available volume of Russian barrels.