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The escalation in the five-month-old US-Iran conflict has prompted Asian buyers to seek alternative supplies while trade and shipping sources cited by Reuters warned that the latest strikes could deter vessels from entering the Gulf to load oil. Prompt monthly spreads for the Dubai benchmark flipped into backwardation of nearly $1 a barrel on Tuesday after remaining in contango for three weeks a shift that signals tighter near-term supplies. Global crude supplies had improved over the prior three weeks following an interim peace deal yet traffic through the strategic waterway slowed sharply according to ship-tracking data.
Gulf Times reported that Iran struck two tankers belonging to Abu Dhabi National Oil Co’s fleet which are used to shuttle crude for transshipment off the UAE and Oman. A shipping source in India told Reuters there is a possibility that even the UAE will find it difficult to get crude out adding that the war premium will rise significantly high. The sources declined to be identified because they were not authorised to speak to the media.
Kpler ship-tracking data showed that just five oil chemicals and dry bulk vessels transited the strait on Monday mostly via the Iranian route with no oil or liquefied natural gas tankers entering the passage. Sparta Commodities senior oil analyst June Goh stated that the mini-glut of oil has now evaporated with fresh risks of disruptions from the Bab el-Mandeb Strait if the Houthis join the attacks. Yemen’s Houthi movement fired missiles at Saudi Arabia on Monday breaking a four-year truce in the conflict with the Iran-aligned group according to multiple reports.
Reuters reported that Abu Dhabi National Oil Co which committed to sales of more than 70 million barrels of crude between June and August is expected to draw on inventories from Fujairah to meet demand although a slowdown in its shuttle service may delay some cargoes. The producer is anticipated to award a tender later this week that could narrow discounts for its grades and boost demand for cargoes loading in September and October. An Indian refining source described the situation as fluid and uncertain preventing proper planning for supply needs.
Asian refiners are expected to turn to arbitrage supplies from West Africa and Latin America to replace Mideast crude while Indian buyers plan to increase purchases of Russian oil according to trade sources. Refiners hold sufficient inventories at present but supply could tighten toward September if the disruption persists for 10 to 15 days. The renewed tensions have also lifted spot prices and refining margins for petroleum products across Asia.
LSEG data indicated that prompt monthly spreads and refining margins for diesel and jet fuel climbed to near two-month highs while margins for 380-centistoke high-sulphur fuel oil edged up to a four-week high. The Asian naphtha crack rose to $184 per metric ton over Brent crude its highest level since May 19. Fuel oil tankers last moved through the strait in early July with no additional visible exits recorded after the latest attacks according to Kpler data.
CME Group research from earlier in 2026 noted that WTI futures had shifted into steep backwardation amid supply disruptions from the US-Iran conflict with near-term contracts trading at significant premiums to later deliveries. A separate Reuters dispatch stated that US President Donald Trump announced the reinstatement of a naval blockade on Iran and indicated that the US would be reimbursed for 20 percent of all cargo shipped through the Strait of Hormuz. The United Nations shipping agency opposed the imposition of fees on vessels passing through maritime waterways but said it would await further details on the policy.
