US Oil Prices to Asia Surge 47% as Analysts Say American Oil Cannot Fill Global Supply Gap

Source: Global Market Report

Currently, U.S. oil and natural gas are in high demand overseas, and Asian countries that heavily rely on Middle Eastern energy imports are seeking alternative supply sources.

According to market pricing agency Argus Media, since the U.S. and Israel launched the first strikes on Iran, the price of U.S. light, low-sulfur crude oil shipped to Asia has surged 47%, reaching $115 per barrel. Meanwhile, U.S. liquefied natural gas (LNG) freight rates have more than tripled, with at least four U.S. LNG ships rerouted from Europe to Asia.

Fabian Ng, Head of Asian Oil Pricing at Argus Media, said that although Japanese refiners have purchased up to 9 million barrels of U.S. crude to arrive in June since the outbreak of war, other Asian buyers are hesitant to pay such high premiums and are watching for any signs of improvement.

However, around the Strait of Hormuz—where about 80% of Asia’s fuel supplies are transported—conflicts are escalating. On Tuesday, the U.S. military claimed to have destroyed 16 Iranian mine-laying boats near this critical energy corridor. President Trump warned Iran on social media that mining the strait would have consequences.

Energy research firm Energy Aspects analyst noted that the war has cut off major energy sources for many Asian countries, forcing Indonesia, Pakistan, and others to use reserves, which may only last a few weeks. As demand surges, U.S. production cannot fill the global gap caused by Middle Eastern oil and gas supply disruptions.

Livia Gallarati, Global Gas Director at Energy Aspects, said, “Most Asian buyers are using inventories, switching fuels, and cutting industrial demand to compensate for LNG supply shortages.”