Why Asian Oil Refiners Stopped Buying Middle Eastern Crude: The Hormuz Reopening, U.S.-Iran Deal, and Bearish Contango Reshape Global Markets

Asian oil refiners, who went on a concentrated three-week buying spree of Middle Eastern crude after the Strait of Hormuz blockade was lifted, abruptly pulled back in late June 2026. The reversal was driven by a rapid shift from war-driven scarcity to a supply glut, following the U.S.-Iran peace deal, the reopening of the Strait, and a surge in OPEC+ production. Here is the breakdown with cited sources.

Why Asian Refiners Pulled Back After a Three-Week Buying Spree

Asian refiners had been aggressively restocking Middle Eastern crude after the Hormuz blockade was lifted. By late June, they had largely filled their near-term requirements and stepped back . Purchases from Abu Dhabi National Oil Co. (ADNOC) eased after three rounds of tenders, with a fourth round expected to show similar softness. The pullback was also driven by the expectation of a wave of incoming supply — there was no urgency to keep buying at elevated premiums .

How Oil Majors and Traders Absorbed the Surplus

As Asian refiners stepped back, oil majors and trading houses stepped in to absorb the surplus barrels that Gulf producers still needed to place. Shell Plc and Mercuria Energy Group Ltd. were among the companies that snapped up cargoes, preventing a collapse in Middle Eastern pricing but confirming that the market was well-supplied .

The Strait of Hormuz Reopening and the U.S.-Iran Deal

The U.S. and Iran reached a memorandum of understanding in mid-June to end hostilities and reopen the Strait of Hormuz, which had been effectively closed since March 2026 . Cargo shipments began moving again, unleashing a massive backlog: more than 60 million barrels of crude oil stranded in the Persian Gulf were ready to head to Asian markets . The physical oil market flipped rapidly — Brent crude fell roughly 13% from pre-deal levels, trading around $78.64/bbl by June 22 .

New Production from Kuwait, Iraq, and OPEC+

Multiple supply-side factors compounded the bearish shift:

• Kuwait began boosting output immediately after the Hormuz reopening, planning to exceed 2 million barrels per day within a week, with repairs to war-damaged infrastructure completed .
• OPEC+ approved a series of production increases: 206,000 bpd in April, then 188,000 bpd in June, and another 188,000 bpd for July 2026, with Saudi Arabia, Russia, Iraq, Kuwait, and others participating .
• Gulf producers also ramped up ship-to-ship transfers off the UAE and Oman in June, depressing spot differentials for Middle East crude to discounts .

Bearish Contango Market Structure

The combination of a sudden flood of supply from the Hormuz reopening, the backlog of 60+ million barrels, and OPEC+'s coordinated output increases pushed the crude futures curve into a bearish contango — where near-term prices are cheaper than later-dated contracts. This structure incentivizes storing oil rather than buying prompt cargoes, further depressing spot buying by refiners. Several crucial segments of the oil market experienced a surge in supply that flipped sentiment from war-driven scarcity to oversupply .

Brent Crude Forecasts and Implications Through Mid-2026

• Goldman Sachs Research projected that oil prices would fall further after the deal but were unlikely to return to pre-war levels immediately, forecasting Brent crude would average $75 per barrel next year .
• Fitch Ratings said the market was expected to swing back into oversupply after the Hormuz reopening, and that the disruption did not alter the longer-term bearish direction of the market .
• Brent crude hit a three-month low in mid-June, with prompt WTI futures dropping more than $4 in a single session .
• S&P Global noted that while physical crude markets would remain tight through summer, the normalization of flows would ease long-term supply fears .

Refinery Buying Behavior Outlook

Most Asian buyers have already committed to supply arriving from June through August and are now well-stocked . A U.S. temporary waiver on Iranian oil sanctions is not expected to attract broad Asian orders — only independent Chinese refineries are likely to be the primary purchasers of Iranian barrels . Refinery buying behavior through mid-2026 is expected to remain cautious and opportunistic, favoring spot cargoes at discounted differentials rather than term commitments, as the contango structure encourages waiting.