Indian and Chinese refiners have intensified spot buying of Middle Eastern crude, pushing prices to near 2026 highs amid geopolitical tensions and supply disruptions. The bid for Persian Gulf grades highlights accelerating regional demand and heightened market stresses.
Indian and Chinese refiners have sharply increased spot buying of Middle Eastern crude in early September, adding fresh pressure to a market already strained by supply concerns and stronger regional demand. Traders familiar with the market said Indian Oil Corp. has accelerated purchases of Persian Gulf grades, while PetroChina has bought several million barrels from Saudi Arabia, Iraq and the United Arab Emirates on the open market. Both companies declined to comment.
The surge has quickly fed through to prices. Dubai benchmark futures have climbed to near $100 a barrel, their highest level since May 2026, while spot premiums for Oman and Murban crude have also moved higher. Traders said Murban is now commanding a premium of more than $30 a barrel over Dubai for delivery to East Asia, a gap that reflects how tight regional supply has become.
Concerns over the security of Persian Gulf flows have helped drive the scramble. Late-August attacks on tankers in the Strait of Hormuz disrupted cargo movements through one of the world’s most important oil shipping routes, while rising US-Iran tensions have added to fears over supply reliability. Traders estimate that between 6 million and 8 million barrels a day of Middle Eastern crude passed through the strait last week, leaving refiners highly sensitive to any further interruption.
The squeeze has been reinforced by weaker Saudi exports and delayed cargoes. Tanker-tracking data from Bloomberg, Vortexa and Kpler show Saudi crude exports falling to their lowest levels in records stretching back to early 2017. At least two Indian refiners have also had August cargoes pushed into September or October, forcing them back into the spot market for replacement barrels.
The buying rush is not limited to India and China. South Korean and Japanese refiners are also competing for Persian Gulf supplies, while Chinese buyers have widened their search to Brazil, Canada and Argentina, with some Forties crude from the North Sea said to be heading to Sinochem. The Energy Information Administration said China imported 11.3 million barrels a day of crude in 2023, a record, while S&P Global reported that Asian refiners remain heavily dependent on Middle Eastern sour crude because many plants are configured to run those grades efficiently. Saudi Aramco has also said it was supplying full requested volumes to Asia in September, underscoring how determined regional buyers remain despite higher prices.
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