Middle East conflict disrupts Asian refinery crude supply

July 22, 2026 at 06:30 PM1 min

This digest was compiled by AI from multiple sources — links to the originals are below.

Asian refiners face crude supply delays after the Strait of Hormuz reopened briefly in late June and early July, only to stall again due to renewed Iran-U.S. hostilities. The expected ramp-up in fuel output for the third quarter may not materialize, with traffic through the strait falling to its lowest since May.

Supply Disruption

Asian refiners that had anticipated a flood of crude from the Middle East in August now face potential delivery delays, according to analysts cited by Reuters. The Strait of Hormuz, which saw only a handful of tankers per day in May, reopened briefly after a U.S.-Iran memorandum of understanding but has since stalled again. The collapse of the ceasefire has halted the expected recovery in crude flows.

Refinery Impact

Chinese refiners cut crude processing in June to pandemic-era lows, driven by supply disruptions and weak domestic demand. A Chinese refinery executive told Reuters that delays in July and August loadings could further postpone the ramp-up of fuel production. Refiners in the U.S. and Europe are operating near capacity, but Asian throughput may not see the expected increase.

Houthi Threat

Adding to the supply concerns, Iran-aligned Houthis threaten to block the Bab el-Mandeb Strait, which could cut off Saudi Arabia’s Red Sea oil exports. Asian refiners that relied on Red Sea crude in recent months now face additional uncertainty. The combination of chokepoint disruptions threatens to derail the global fuel supply recovery.