Reuters reported Middle Eastern crude prices in Asia dropped to their lowest point inmonths as Asian refiners held off on spot purchases and China and India gorged on cheap Russian oil.
In accordance with traders, Saudi Arabia, the world's largest exporter, may lower rates for its term cargoes to Asia for a second consecutive month in July as a result of the price decline. On Wednesday, the benchmark Dubai crude premium dropped to a 4-month low of 70 cents per barrel over Dubai quotes, and Qatar set the price of al-Shaheen for the July term at a 27-month low after increasing supplies.
China and India, the world's No. 1 and No. 3 crude importers, respectively, are purchasing record amounts of Russian crude at the highest prices since the December embargo, in contrast to Europe and the United States where sour crude prices have weakened due to the boycott of Russia's oil and the strong demand for alternative supplies.
Some Asian refiners reduced output in April 2023 as a result of low refining profits, according to traders.
Russian crude arrivals in China in May are predicted by shiptracking data from Kpler to be approximately 44 million barrels, the second-highest level ever. According to Vortexa statistics, China's commercial crude inventory increased to 950 million barrels this week from less than 900 million barrels two months prior, indicating that its refiners are not in a rush to purchase additional oil.
In June and July, Taiwan's Formosa Petrochemical (6505.TW) intends to reduce the amount of oil processed at its 450,000 bpd Mailiao refinery.
Following the closure of a 129,000 bpd unit last week by another Japanese refiner, Eneos (5020.T), Cosmo Oil (5021.T) of Japan shut down a 102,000 bpd crude processing facility on Wednesday.
Since lighter grades produce products of greater quality, their prices are often higher than those of heavier grades.
Additionally, American crude is becoming more expensive than Middle Eastern oil for Asian consumers, thereby narrowing the opportunity for arbitrage for American oil supplies to Asia.
References:
Xu, Muyu. 2023. Reuters: Sour crude prices weaken in Asia despite OPEC+ cuts. Retrieved from https://www.reuters.com/markets/commodities/sour-crude-prices-weaken-asia-despite-opec-cuts-2023-05-19/
Image by atlascompany via https://www.freepik.com/Regardless of Cuts from OPEC+, Sour Crude Prices Declined in Asia
Reuters reported Middle Eastern crude prices in Asia dropped to their lowest point inmonths as Asian refiners held off on spot purchases and China and India gorged on cheap Russian oil.
In accordance with traders, Saudi Arabia, the world's largest exporter, may lower rates for its term cargoes to Asia for a second consecutive month in July as a result of the price decline. On Wednesday, the benchmark Dubai crude premium dropped to a 4-month low of 70 cents per barrel over Dubai quotes, and Qatar set the price of al-Shaheen for the July term at a 27-month low after increasing supplies.
China and India, the world's No. 1 and No. 3 crude importers, respectively, are purchasing record amounts of Russian crude at the highest prices since the December embargo, in contrast to Europe and the United States where sour crude prices have weakened due to the boycott of Russia's oil and the strong demand for alternative supplies.
Some Asian refiners reduced output in April 2023 as a result of low refining profits, according to traders.
Russian crude arrivals in China in May are predicted by shiptracking data from Kpler to be approximately 44 million barrels, the second-highest level ever. According to Vortexa statistics, China's commercial crude inventory increased to 950 million barrels this week from less than 900 million barrels two months prior, indicating that its refiners are not in a rush to purchase additional oil.
In June and July, Taiwan's Formosa Petrochemical (6505.TW) intends to reduce the amount of oil processed at its 450,000 bpd Mailiao refinery.
Following the closure of a 129,000 bpd unit last week by another Japanese refiner, Eneos (5020.T), Cosmo Oil (5021.T) of Japan shut down a 102,000 bpd crude processing facility on Wednesday.
Since lighter grades produce products of greater quality, their prices are often higher than those of heavier grades.
Additionally, American crude is becoming more expensive than Middle Eastern oil for Asian consumers, thereby narrowing the opportunity for arbitrage for American oil supplies to Asia.
References:
Xu, Muyu. 2023. Reuters: Sour crude prices weaken in Asia despite OPEC+ cuts. Retrieved from https://www.reuters.com/markets/commodities/sour-crude-prices-weaken-asia-despite-opec-cuts-2023-05-19/
Image by atlascompany via https://www.freepik.com/Related Insights
Global Chemical Production: What Lower 2025 Results Across Major Chemical Companies Mean for Buyers
Most major chemical companies reported weaker sales and earnings during 2025, with DuPont standing out as a notable exception. Procurement teams should understand what these financial results reveal about demand, pricing and the future direction of the global chemical industry.
MEG: The 6.5 Million Tonne Gulf Export That Reshaped Asian Polyester Supply Chains
The disruption of Gulf MEG exports has transformed procurement strategies across Asia's polyester industry. As shipments begin moving again, buyers must understand transit timelines, supply recovery patterns and pricing risks before inventories normalize.
VCI Q2 2026 Review Signals Deepening German Chemical Weakness
The upcoming VCI Q2 2026 report underscores a sharp decline in German chemical production, driven by soaring feedstock costs and weak domestic demand. Naphtha‑based downstream plants are hit hardest, while export disruptions to Asia and the Gulf further strain utilization rates. For buyers, the data offers critical insight into supplier stability and pricing dynamics across Europe.
The Paradox of June 29, 2026: Why Brent Is Below Pre-War Levels Despite Active Drone Strikes
Brent crude has fallen below pre-war levels despite active military escalation in the Gulf, creating a rare market paradox. For chemical procurement teams, falling feedstock costs and unresolved logistics risk are sending completely opposite signals into H2 2026.
Caustic Soda Supply Tightening in Southeast Asia as Middle East Constraints Reshape Q3 2026 Trade Flows
Caustic soda markets across Southeast Asia are entering a period of tighter availability as Middle East disruptions ripple through global supply chains. Higher spot prices, shifting trade flows and longer lead times are forcing procurement teams to reassess sourcing strategies for Q3 2026.
Natural Gas Markets and Chemical Prices: What Every Buyer Needs to Know in 2026
Natural gas is the feedstock that determines the cost of ammonia, urea, methanol, hydrogen and dozens of downstream chemicals. The 2026 Hormuz crisis disrupted Qatari LNG exports and sent Asian spot prices surging, reshaping chemical competitiveness across every major producing region. Here is what procurement teams need to understand about gas markets and where prices go from here.
Don't miss out on our updates! Subscribe to our newsletter now
We're committed to your privacy. Tradeasia uses the information you provide to us to contact you about our relevant content, products, and services. For more information, check out our privacy policy.