Asian countries went on a buying spree, pushing Dubai oil prices close to $100.

With Middle Eastern supplies continuing to tighten, a buying frenzy is intensifying in the Asian crude oil market. As buyers increase their purchases, regional crude oil prices are rising rapidly, and the supply shortage is beginning to be reflected in prices.

On September 5, Bloomberg, citing multiple unnamed traders, reported that strong demand for Middle Eastern crude oil from Asian refiners is driving a rapid rise in related benchmark prices. UAE benchmark Murban futures are currently trading at $106.10 per barrel, while DME Oman crude for the Asian market is at $99.18 per barrel, nearing the $100 mark.

The ongoing Middle East conflict, the continued obstruction of the Strait of Hormuz, and the drop in Saudi oil exports to their lowest level since 2017, coupled with delivery delays for some crude oil shipments (postponed from August to September or even October), have further exacerbated the pressure to secure supplies in the Asian market.

Asian refineries are scrambling to secure supplies as competition for alternative sources intensifies.

According to Bloomberg, major refineries such as Indian Oil, as well as refineries in South Korea and Japan, are becoming the main buyers in this round of increased Middle Eastern crude oil purchases.

Meanwhile, crude oil shipments through the Strait of Hormuz remain significantly below normal levels. Over the past week, the average daily volume of crude oil transported through the strait was only about 6 to 8 million barrels. Data from ship tracking agencies Kpler and Vortexa shows that Saudi oil exports have also fallen to their lowest level since 2017.

With supply tightening, Asian buyers are expanding their alternative sources. Buyers such as India are increasing imports of crude oil from Brazil, Canada, and Argentina, while also ramping up their purchases of Russian crude.

Competition is particularly fierce for Russian ESPO crude oil. According to Bloomberg, premiums for the commodity have risen to record highs, indicating that Asian refiners are engaging in increasingly intense competition for limited alternative sources as traditional supply channels are disrupted.

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