Asian refineries rush to secure oil a month in advance! Persian Gulf crude spot premiums soar to $38 per barrel

Japan's two leading oil refiners have broken with traditional purchasing rhythms, locking in Middle Eastern crude cargoes a month ahead of schedule and pushing Persian Gulf spot premiums up to $38 per barrel.

Eneos Holdings and Idemitsu Kosan recently purchased Oman crude for loading as early as October. Typically, Persian Gulf cargoes bought in September are not loaded until November—this time, the purchasing date is exactly one month earlier. Two batches of 2 million barrels each were concluded at a price $38 per barrel above the Dubai benchmark, with sellers including trading houses and oil majors. Both companies declined to comment.

Domestic refiners Shandong Dongming Petrochemical and Shenghong Group have recently bought Middle Eastern crude for delivery between October and November, while Indian state oil companies have also booked October-loading cargoes through tenders. This concentrated release of Asian demand is sharply driving up Persian Gulf crude spot premiums.

Behind the buying rush is last week’s closure of Saudi Arabia’s east-west oil pipeline after an attack—the pipeline, with a daily capacity of about 7 million barrels, is a key alternative route that bypasses the Strait of Hormuz. Its closure has caused a potential shortfall of around 4 million barrels per day, roughly 4% of global supply, and Saudi Aramco has already delayed deliveries to some European customers.

Securing Cargoes a Month Ahead—Breaking the Traditional Purchasing Calendar

Eneos Holdings and Idemitsu Kosan bought Oman crude for loading as early as October, whereas Persian Gulf cargoes purchased in September are usually not loaded until November, a full month earlier than usual. Both companies declined to comment.

This timing change is not an isolated case. Last week's attack forced Saudi Arabia to close its east-west pipeline. This 1,200-kilometer line traverses the Arabian Peninsula and is a key alternative route to bypass the Strait of Hormuz, taking crude to Yanbu Port on the Red Sea. With the pipeline shut, Yanbu's stockpiles can sustain export demand for only five to seven days. Repair times are estimated from several days to five or six weeks.

Two batches of 2 million barrels of Oman crude were sold at premiums of $38 per barrel above the Dubai benchmark—far surpassing normal levels and directly reflecting the scarcity premium of prompt cargoes. Sellers included trading houses and oil majors.

Amid supply disruptions, Saudi Arabia has redirected oil exports from Yanbu back to eastern ports. Red Sea exports in August fell by 4.5 million barrels per day compared to July, drastically cutting the number of prompt cargoes available for sale. Buyers are paying higher premiums in exchange for certainty of loading schedules.

For Japanese refiners, when Asian buyers move into the spot market at the same time, they have no choice but to pay higher premiums to secure cargoes, pushing up procurement costs. If Persian Gulf premiums remain elevated, Asian buyers' behavior of securing cargoes ahead of time may shift from isolated incidents to a wider trend. The next focus will be on the progress of repairs to Saudi Arabia’s east-west pipeline and whether Persian Gulf spot premiums will fall back once supply resumes.