Crude Premiums Reach Record Highs Amid Shipping Disruptions

Spot premiums for Middle Eastern crude oil have reached multi-year highs this week as Asian refineries scramble for alternative supplies. The surge follows military conflict involving the United States and Israel against Iran, which has paralyzed shipping through the Strait of Hormuz and severely restricted global oil flows. The benchmark Dubai cash premium jumped to $19.63 per barrel on Thursday, marking the highest level recorded by Reuters since 2018. Similar spikes were observed for other regional grades, with premiums for Oman and Murban crude hitting $19.15 and $17.87 per barrel, respectively. Richard Jones, a crude analyst at Energy Aspects, noted that Dubai spreads have surged because exports remain stranded within the Middle East Gulf, making price discovery exceptionally difficult. > "We expect Strait of Hormuz disruptions to continue through at least mid-March." The geopolitical tension has pushed Brent Crude Oil to its highest levels since July 2022. This rally has widened the Exchange of Futures for Swaps (EFS)—the spread between Brent and Dubai swaps—to $10.42 per barrel, up from just 69 cents at the beginning of 2026. Anh Pham, a senior analyst at the London Stock Exchange Group plc, explained that the EFS spike reflects the difficulty Asia faces in replacing Middle Eastern volumes. > "Asian buyers are competing more aggressively for crude available outside the strait." In response to the supply crunch, some refiners in Asia have turned to more distant sources, including Canada and Brazil. However, surging freight rates and longer transit times have made these alternatives increasingly expensive. For instance, the discount for Canadian TMX crude delivered to Asia narrowed significantly to $1 per barrel against ICE Brent, compared to over $4 just one month ago. Further complicating the market is a recent change in the Dubai crude price assessment by S&P Global Inc.. On Monday, the agency excluded several grades from its Market on Close process due to shipping disruptions, including those from Qatar and certain ports in the United Arab Emirates. A trader based in Singapore stated that this move effectively reduced deliverable crude by approximately 70%, leaving only Murban from Fujairah and Oman available for delivery. S&P Global Energy defended the methodology in a statement to Reuters, asserting that the system remains robust despite the turmoil. > "The fact that Platts Dubai continues to serve the market effectively through the potential delivery of more than two million barrels per day of oil demonstrates its resilience even in these most extraordinary of times." Trade data shows that TotalEnergies SE has emerged as a primary bidder in the market window, purchasing nine Oman and Murban cargoes over the last four days.