Asia Shifts Oil Supply Sources Amid Looming Sanctions on Iran and Russia
Asian oil giants China and India are ramping up crude imports from the Middle East and Africa in response to anticipated sanctions targeting Iranian and Russian oil, Bloomberg reports.
Recent weeks have seen a tightening supply of Russian and Iranian crude due to intensified Western sanctions, which have also driven up prices for oil from the two nations. Now, with expectations of stricter measures under the incoming Trump administration for Iran and fresh sanctions on Russian oil tankers from the outgoing Biden administration, both countries are diversifying their sources.
The reduced availability of Iranian and Russian crude has sparked a surge in demand—and prices—for Middle Eastern oil. Premiums for Oman and Dubai crude over the global benchmark, Brent, have reached rare levels. Similarly, Abu Dhabi and Angolan crude are becoming key alternatives for Asian buyers, particularly Indian refiners and Chinese traders.
Increased U.S. sanctions have redirected Iranian oil to floating storage off Southeast Asia as Chinese buyers tread cautiously. Meanwhile, Russia faces mounting pressure to adhere to OPEC+ production quotas and navigate restrictions on its shadow fleet of tankers, leading to a decline in seaborne exports.
With sanctions reshaping global oil dynamics, China’s and India’s pivot toward Middle Eastern and African crude highlights a strategic shift to ensure uninterrupted energy supplies.
Source: Oilprice.com
