Strait of Hormuz shipping disruptions lead Asian refineries to resume US crude purchases.

As U.S.-Iran tensions escalate and shipping activity in the Strait of Hormuz plummets, Asian refineries are ramping up spot purchases of U.S. crude oil to hedge against risks of Middle East supply disruptions. Multiple industry executives involved in U.S. crude oil sales and Asian refinery procurement operations said both sides have restarted negotiations for U.S. crude oil spot deals. Data shows that as of Tuesday, observable vessel traffic in the Strait of Hormuz has nearly ground to a halt. Kpler data indicates only 14 vessels passed through the strait last Sunday, including 4 crude oil tankers, a roughly 60% drop from the same period the prior week. Before the outbreak of tensions, over 100 vessels transited the strait daily, carrying around 20 million barrels of petroleum products via the route. Additionally, maritime intelligence firm Windward said the southern route of the Strait of Hormuz, which was escorted by the U.S. military, had "effectively collapsed" last Saturday, with an increasing number of vessels diverting to routes on Iran’s side. The U.S. Department of Energy, however, noted that more than 8 million barrels of crude oil still passed through the strait last Sunday, adding that the U.S. military will continue to ensure unimpeded oil transport.