Middle Eastern crude rebound boosts Asian refiners as Gulf capacity stays impaired
Middle Eastern oil exports are returning toward pre-conflict levels, while damaged Gulf refineries keep regional processing down, allowing Asian refiners to capture more value.
Exports of crude oil and condensate from the Middle East have largely recovered, with tanker movements through the Strait of Hormuz increasing after a period of disruption. However, more than half of the region's refining capacity remains offline after roughly 20 refineries were hit, removing over 2.3 million barrels per day from service. This shortfall means Gulf producers must rely on external processors, and Asian refiners are well positioned to step in.
With about 37% of the world’s refining capacity, India, China, South Korea and Singapore can convert the incoming crude into higher-value fuels, benefiting from rising refining margins worldwide. The shift also alters global trade dynamics, as a larger share of Gulf crude profits flows east while the United States and other American producers gain a stronger foothold in export markets.
Why it matters
The rebound in Middle Eastern crude combined with limited Gulf refining shifts profit and supply power toward Asian markets.
How this story developed
- Sep 15 UK fuel prices hit four-year highs as oil market turmoil continues
- Sep 22 Trump told reporters he wants to stop sending diesel abroad, citing the surge in diesel costs driven by conflicts in Iran and Ukraine. Treasury Secretary Scott Bessent said the administration is reviewing whether a full or partial ban is feasible. Republican Senate hopefuls, including Ashley Hinson, have urged the government to adopt the ban to ease price pressures on Americans.
- Sep 23 Rural GOP lawmakers have publicly demanded action on diesel exports ahead of the November election.
- Sep 24 President Trump announced support for a diesel export ban.
- Sep 24 Saudi Arabia, the UAE and other Gulf producers have rerouted oil through spare pipeline capacity and a U.S.-protected corridor, keeping global supply steady despite higher prices.
- Sep 26 The European Union has asked the administration to keep U.S. diesel exports flowing amid the price surge.
- Sep 26 President Donald Trump announced new fuel-economy rules that scrap the electric-vehicle mandate introduced under Joe Biden.
- Sep 28 The 2031 fuel‑economy target was lowered to roughly 34.9 mpg.
- Sep 29 Trump said he will look into limiting diesel exports.
- Sep 30 Diesel prices have risen to a record level, with a full tank now costing about £110.
- Oct 5 G7 nations agreed to tap emergency reserves after the United States signaled it would not impose a diesel export ban.
- Oct 5 A U.S. naval blockade has caused a backlog of hundreds of trucks at the Gürbulak crossing, with waits up to five days.
- Oct 8 A tanker north of Qatar was hit by multiple projectiles, causing casualties.
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