Hormuz Closure Puts US West Coast Refiners in Competition for Pacific Crude
Asian buyers hunting non-Middle East barrels are bidding against US West Coast processors cut off from their traditional Gulf supply since February.
India's state-owned refiner HPCL acquired Okwuibome and Utapate crudes from Nigeria via a Glencore tender, trading sources told Reuters on Tuesday (2026-08-04) — one in a series of West African purchases by Asian buyers tightening the pool of alternative crude available to US West Coast refiners.7,8
The Strait of Hormuz closed on February 28, cutting off the medium sour grades US West Coast processors traditionally depended on. The Middle East Gulf accounted for 8% of total US crude imports in 2025, or roughly 490,000 b/d, according to EIA data, with flows dominated by medium sour barrels that transit Pacific routes to West Coast refineries.3,5
Indian buyers are displacing Middle East term supply with West African alternatives. Several Indian refiners recently bought crude from Oman and West Africa via tenders, trade sources told Reuters on Wednesday (2026-08-05), as Hormuz shipping constraints continue to choke supply. In a separate transaction, HPCL also acquired 2 million barrels of Nigerian crude from Shell.7,8
The scale of redirection shows up in US trade data. Kpler data put US crude exports at 5.15 million b/d in April, up 1.22 million b/d from March, as international buyers sought non-Middle East barrels. With Middle East production shut-ins reaching 10.5 million b/d in April and expected to peak near 10.8 million b/d in May, buyers in Asia and Europe turned more aggressively to alternative suppliers including the US, according to OGJ analysis.2
India's May import figures show how far reallocation has run. Overall crude imports by the world's third-largest oil importer rose to 5.27 million b/d in May, up 15.4% from April, with Russia the largest supplier at 1.92 million b/d, up around a fifth from April. Russian oil accounted for about 36.5% of India's total imports, slightly above 35% in April.4
The UAE filled some of the shortfall. UAE crude supplies into India rose nearly 41% to 942,500 b/d in May, the first full month after the Gulf producer's exit from OPEC, with supply boosted from Fujairah.4
US crude is drawing overseas interest from Asian and European refiners as supply concerns spread from the Middle East to the Black Sea, Rigzone reported. OGJ forecasts US crude production at 13.65 million b/d in 2026, up 0.5% from 2025, rising to 14 million b/d in 2027.6,2
European product markets add another pull on US supply. The US exported a record 1.07 million b/d of distillates last October, the last month for which EIA statistics are available, with Europe accounting for 48.4% of all US distillate exports, up from 43.5% a year prior.1
Petroplus Holdings announced the closing of three of its five refineries on Friday (2026-05-15), after banks froze more than $2 billion of the Swiss company's credit lines. Output from the combined 667,000 b/d of shuttered capacity has already ceased; its UK and German refineries are running at half of their combined 330,000 b/d capacity. January diesel contracts on London's ICE settled at $967.50 a metric ton on Thursday (2026-05-14), up 4.7% for the week, partly on supply worries following the closures.1
More customers competing for US fuel supply will likely result in higher prices, said Sander Cohen, analyst at energy consultancy ESAI Inc.1
For US West Coast refiners, the 490,000 b/d of Middle East grades that supplied 8% of US crude imports in 2025 is largely shut off, and the Indian tender spree for West African alternatives shows competition for replacement barrels is intensifying. Crude run rates and crack spread data in coming weeks will show how much of the higher delivered cost processors can absorb.5,8