Oil-buying frenzy in Asia ignites Middle East crude

Refineries in India and China, the world’s largest oil importers, are ramping up purchases of Middle Eastern crude from the spot market, pushing prices higher. Refining companies in both countries are offering more competitive bids for Gulf barrels, competing with buyers in South Korea and Japan for supplies threatened by escalating tensions between the United States and Iran. Standard futures for Dubai crude rose to around $100 per barrel, marking the highest level since May, while price premiums for Oman and Murban crudes surged amid fears of supply disruptions stemming from Iran and its proxies. Sources familiar with the matter said that refiners backed by New Delhi, led by the country’s largest refinery, Indian Oil, accelerated their purchases of Middle Eastern crude over the past few days. They added, speaking on condition of anonymity due to the sensitivity of the issue, that the market could see further buying, including from private refining giant Reliance Industries. State-owned Chinese firm PetroChina recently purchased millions of barrels of crude from Saudi Arabia, Iraq, and the United Arab Emirates in the spot market. Buyers have also turned to distant markets such as Brazil, Canada, and Argentina, while some shipments of British Forties crude are being directed to Chinese firm Sinochem. Although purchases remain below pre-war levels, the race for cargoes is putting pressure on Middle Eastern crude prices. Traders said Murban crude in Abu Dhabi is priced at a premium of more than $30 per barrel compared to Dubai crude for delivery to East Asia, which is at least $10 higher than the cost of delivering West Texas Intermediate crude from the United States. OPEC+ Meeting Meanwhile, sources said that the upcoming OPEC+ meeting scheduled for next Sunday will not include any decision on oil production policy, with discussions focusing primarily on market developments. In the same context, Russian Deputy Prime Minister Alexander Novak said that OPEC+ ministers would discuss market conditions and compliance with current production agreements during the meeting, according to Reuters.