Strait of Hormuz Closures Spur Global Shift Towards US Crude
The repeated closures and reopenings of the Strait of Hormuz have led to a significant shift in global crude oil trade flows, with Asian and European refiners pivoting towards the United States. As a result, West Texas Intermediate (WTI) is transforming from a 'U.S. benchmark' into a 'global benchmark.'
On September 11, U.S. crude oil futures briefly touched $104.46 per barrel, marking a new high since May 19.
The persistent escalation of the geopolitical risk premium reflects a profound restructuring underway in global crude oil trade flows. European and Asian refiners are becoming increasingly linked to U.S. pricing mechanisms, strengthening WTI's position as a global pricing benchmark.
Asian refiners are rapidly accelerating purchases of U.S. crude, driven by record import volumes in South Korea and Japan, which traditionally sourced over 90% of its crude from the Middle East. Singapore has also resumed active purchasing of U.S. crude amid severe disruptions to traffic through the Strait of Hormuz.