Asian Demand Slump Lowers Middle Eastern Crude Prices

Asian refiners have slowed their purchases of Middle Eastern crude oil after a three-week buying spree, having largely fulfilled their requirements for June and July. This drop in demand has contributed to falling prices for Dubai and Murban benchmark grades.

Abu Dhabi National Oil Company sold roughly 60 million barrels through three tenders for loading between June and August. While Asia remains a primary destination, volumes are shifting toward Europe as China reduces its intake. To absorb the resulting surplus, trading houses and oil majors, including Shell and Mercuria Energy Group, have acquired additional barrels.

Global supply has further expanded as Iraq and Kuwait increase production in anticipation of the Strait of Hormuz reopening following peace talks to end the war with Iran. Simultaneously, the federal government of the United States issued a temporary waiver allowing the purchase of Iranian oil, though financing and insurance risks continue to limit the impact of this expanded supply option.