Red Sea Attacks Fuel Surge in Middle East Crude Premiums

Attacks on tankers in the Red Sea have caused Middle East crude premiums to surge, disrupting supply flows and prompting Asian refiners to seek alternative sources. Spot premiums for Dubai crude benchmarks hit their highest level in two months, with a $12.74 per barrel premium recorded on Thursday. Oman's premium also climbed to $12.62, the highest since May.

The attacks, attributed to Yemen's Iran-aligned Houthis, have forced some Saudi oil shipments to be rerouted via Africa, further constricting supply flows through the Strait of Hormuz. This has caused a significant increase in Brent's premium to Dubai, settling at $13.22 per barrel on Thursday.

Several Asian refiners are looking for alternative sources, with South Korea's largest refiner SK Energy chartering a VLCC to load 2 million barrels of crude from Egypt's Mediterranean port of Sidi Kerir. This move is part of a broader trend, as Japanese and South Korean refiners rush to secure supplies, seeking Atlantic Basin crude.