Asian Refiners Drive Middle Eastern Crude Premiums to Records as Hormuz Flows Stay Crimped
Indian and Chinese buyers are paying sharp premiums for Persian Gulf spot cargoes as Hormuz transit volumes run well below their long-run average, pushing ICE Brent toward $100 a barrel.
ICE Brent crude front-month held near $98.87 a barrel in early Wednesday (2026-09-09) trade, approaching triple digits, as Indian and Chinese refiners competed aggressively for Persian Gulf spot cargoes and Strait of Hormuz transits stayed depressed.7
The spot market is showing the clearest evidence of tightness. India and China, the world's two biggest oil importers, stepped up purchases of Middle Eastern crude in early September (2026-09-03), Rigzone reported, with processors in both countries bidding more aggressively for Persian Gulf barrels. Abu Dhabi's Murban grade commands a premium of more than $30 a barrel over Dubai for delivery to East Asia, traders said — a spread that reflects how heavily buyers are pricing in sustained access risk, not just headline volume.7
Hormuz is the reason. The EIA estimated that approximately 20 million barrels of crude oil and petroleum products per day passed through the strait in 2024, representing about 20% of global petroleum liquids consumption. By the week of August 24 (2026-08-24), that volume had fallen to between 6 million and 8 million barrels per day, Rigzone reported, with attacks in the waterway potentially cutting flows further.7,3
Chinese operators have been adapting. Bloomberg reported on August 19 (2026-08-19) that two Chinese very large crude carriers made U-turns inside the strait and were idling in the area. One of those supertankers, Sea V, had loaded crude in Iraq before the reversal. Separately, Kpler data showed Chinese tanker operators conducting ship-to-ship transfers in the Gulf of Oman outside the strait at an average rate of 600,000 barrels daily over June and July, Reuters reported.6
The China demand picture complicates the bullish read. June crude imports fell 41% year-on-year to 29.27 million tons, or about 7.2 million barrels per day, close to a decade low, Mirae data showed. China's crude inventories stood at around 1.2 billion barrels as of early May, down only 54 million barrels since then.4 Data from August 17 (2026-08-17) indicated China had cut crude imports by 4 to 5 million barrels per day.5 But the aggressive spot buying reported in early September suggests some Chinese refiners are betting their inventory buffers are insufficient cover for a prolonged supply disruption.7
Futures have already absorbed most of that logic. On Tuesday (2026-07-14), Brent gained $2.74, or 3.29%, to $86.04 a barrel on renewed US-Iran hostilities, Yahoo Finance reported. By July 19 (2026-07-19), the front-month touched an intraday high of $91.41 before settling at $90.56. On Monday (2026-08-17), both the US and Iran ruled out extending the June agreement, Tehran warned of offensive action if diplomacy failed, and Brent rose more than 2.5% to close at $92.81, while NYMEX WTI crude front-month gained more than 3% to $84.96.2,3,5
Analyst targets set only weeks ago now look conservative. ETO Markets' Chief Investment Officer Jonathan Barratt said on July 12 (2026-07-12) that Brent could reach $85-$87 if Hormuz uncertainty persisted, a range the market has since cleared by a wide margin. Mirae's Mohammed Imran said in late July (2026-07-31) that a Brent average of $90 by year-end was plausible if disruptions lasted to mid-September; with the front-month near $99, that scenario is tracking ahead of its own timeline.1,4
Citi added a political dimension in a July 14 (2026-07-14) research note, flagging that the probability of Iran abandoning its memorandum of understanding with the US before the midterm elections had risen, a scenario that could result in oil prices staying elevated for an extended period.2
The Murban-Dubai premium is the signal to monitor. At more than $30 over Dubai for East Asian delivery, it shows physical buyers are paying to secure supply, not just hedging paper risk. If Chinese operators can scale Gulf of Oman ship-to-ship transfers beyond their current 600,000 barrels daily, or establish alternative routing at volume, that premium could compress. If Hormuz transits deteriorate below the already-reduced 6 to 8 million barrel daily range reported for the week of August 24 (2026-08-24), Mirae's $90 average looks like a floor rather than a ceiling.7,6