Strait of Hormuz Closure Drives Asian Crude Imports to 10-Year Low

The closure of the Strait of Hormuz during the Iran war has triggered a severe supply shock, driving Asian crude imports to a 10-year low of 20.4 million barrels per day in April. This represents a 22% annual decline, as approximately 12 million barrels per day of crude are blocked from reaching Asian markets.

Asian refineries have responded by slashing throughput, with runs expected to fall to roughly 28.5 million barrels per day across April and May. To compensate for the loss of medium-sour Middle East crude, refineries are utilizing lighter alternatives from the United States, Kazakhstan, and West Africa. Because lighter crudes produce fewer middle distillates, diesel and jet fuel output is estimated to decrease by 1 million to 2 million barrels per day.

Regional governments and industries are taking defensive measures to manage the shortage. The Government of China has curtailed fuel exports to protect its domestic supply and is prioritizing transportation fuels over petrochemicals. Meanwhile, refinery utilization rates in Singapore, Japan, and South Korea have fallen significantly below normal levels. A full recovery of the regional energy market remains contingent upon a resolution to the conflict and the reopening of the Strait of Hormuz.