Growing oil glut spurs Asian refiners to offer cargoes to the US
“Asian refineries are already well supplied till August, and the prompt barrels released from the Strait of Hormuz simply pushes the balances into an overhang, without China picking up on demand. Asia’s surplus is now even making it economical to sell Middle East oil to western destinations.” — June Goh, Senior Oil Analyst at Sparta.
- Expert: June Goh (Senior Oil Analyst, Sparta)
- Publication: Bloomberg
- Market Focus: Crude Oil, Trade Flows, Global Arbitrage Economics
- Geographies: Asia, Middle East (Persian Gulf), US West Coast
In a recent analysis for Bloomberg, Sparta’s Senior Oil Analyst, June Goh, flags the scale of oversupply emerging as the Strait of Hormuz reopens and Persian Gulf production ramps up faster than Asian demand can absorb. Asian refineries already well supplied till August are now being forced to push barrels west — creating unusual East-West arbitrage flows and marking the first Middle Eastern crude flows to the US West Coast since 2018. Middle East prices have collapsed to discounts against Dubai as the surplus overwhelms traditional export routes. Traders should monitor whether this marks a sustained structural shift in crude flows and watch arb economics between ME/Asian and US markets closely.
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